Transocean Tops Estimates on Increased Rig Rental Rates

Offshore oil and gas driller Transocean Inc. saw its Q3 profit more than triple to nearly a billion dollars, on record daily rental rates for its advanced ocean drilling rigs and a tax sharing agreement. Net income jumped to $973 million, good for EPS of $3.24, versus EPS of $0.96 a year ago (full earnings call transcript later today). On an adjusted basis, EPS climbed to $2.12 - well above consensus analyst EPS estimates of $1.99. Revenue increased 50% Y/Y to $1.54 billion. Analysts were looking for $1.51 billion in revenue. Transocean received an average daily rent for its most advanced offshore drilling rigs of $323,200 in Q3, up 31% from a year ago. The news sent shares of RIG higher by 2.06% at the open. Transocean plans to merge with GlobalSantaFe, pending the results of a November 9 shareholder vote (full summary).

Sources: Press release, Bloomberg, Reuters, MarketWatch
Commentary: IEZ: Schlumberger's Weak Earnings Call Sector Valuation Into Question • Deep Sea Drillers Ready to Surface • Transocean and GlobalSantaFe Announce Merger
Stocks to watch: RIG, GSF. Competitors: NE, DO. ETFs: OIH, PXJ, IEZ
Earnings call transcript: Transocean Q2 2007 Earnings Call Transcript

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Comments

[pprimo:]

pretty impressive overall. but, GSF just announced after the close, they did nearly the same amount of earnings on or 2.06 on 50% less revenue. Frankly I was disappointed by the merger because both companies have lagged since it was announced. What is clear, is that the combined earnings for both companies will be considerably higher than most models are showing with GSF outperforming. GSF is certainly shaping up to be a bargain. Also, from the Rig conference call, note the optimism on jackups in Gulf of Mexico following favorable lease auctions.

The other highlight from the transocean call was the increasing aggressivness on the part of the Large oil companies towards their drilling programs. currently the most agressiveness is being shown by the NOC's or nationally owned oil companies.

DO's valuation target was recently raised to 178.00/shr, expect the rest of this elite group to follow.

2007 Oct 31 08:36 PM

[StockBoy:]

RIG looks better the gold, at least through the 4th qtr.

2007 Nov 01 11:03 AM

[StockBoy:]

RIG looks better the gold, at least through the 4th qtr.

2007 Nov 01 11:04 AM