- Transocean (RIG +7.4%) surges after easily beating Q4 earnings and revenue expectations, and saying its contract backlog was $11.3B as of its February fleet status report.
- The Q4 beat was driven by higher than anticipated revenues and lower than expected costs of $344M, well below company guidance of $375M-$385M; for the second consecutive quarter, RIG delivered revenue efficiency in excess of 100% and EBITDA margins surpassing 50%.
- RIG says improving market fundamentals along with a steady flow of customer inquiries are raising confidence that the offshore drilling market trough is near.
- However, Raymond James analysts reiterate their Underperform rating on the stock following the report, praising RIG’s ongoing cost controls and strong revenue efficiency while still unable to recommend the stock amid a difficult macro backdrop.