Transocean To Witness A Notable Drop In Its 2Q’16 Earnings Due To Softness In Drilling Demand

-70.72%
Downside
6.28
Market
1.84
Trefis
RIG: Transocean logo
RIG
Transocean

Transocean (NYSE:RIG), the largest offshore drilling service provider, is slated to report its June quarter 2016 financial results after the market closes on 3rd August 2016. [1] We expect the company to report a sharp decline in its revenue as well as earnings as the commodity downturn continued to weigh on the drilling demand in the second quarter.

Based on the latest fleet status report, the company was awarded a two year contract offshore India at a dayrate of $127,000, and two well contracts in the UK sector of the North Sea at an undisclosed dayrate. In addition, the company’s newbuild ultra-deepwater drillship commenced operations on its 10-year contract in the US Gulf of Mexico at a current dayrate of $498,000. As a result, we expect to see an improvement in Transocean’s contract backlog in the 2Q’16 results.

Besides, Transocean stacked 28 of its existing rigs during the quarter as opposed 21 rigs in the previous quarter. This indicates that the company’s utilization is still low compared to the last year, which is likely to impact its top line for the quarter.

Relevant Articles
  1. How Will Transocean Weather The Lull In The Offshore Rig Market?
  2. How Are Transocean’s Key Metrics Expected To Trend?
  3. Key Takeaways From Transocean’s Q4 Results
  4. What To Watch As Transocean Reports Q4 Results
  5. What’s The Outlook Like For Transocean In 2019?
  6. What’s Transocean’s Outlook Like After Solid Q3?

RIG-Q&A-2Q16

Have more questions about Transocean (NYSE:RIG)? See the links below:

Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com

2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Transocean

View Interactive Institutional Research (Powered by Trefis):

Global Large Cap | U.S. Mid & Small Cap | European Large & Mid Cap

More Trefis Research

Notes:
  1. Transocean To Announce Second Quarter 2016 Results, 12th July 2016, www.deepwater.com []