Switzerland-based offshore drilling contractor Transocean Ltd. (RIG) on Wednesday reported a surge in profit for the first quarter from last year, when results were impacted by goodwill impairment losses and a hefty loss from discontinued operations.
The company's revenue efficiency for the first quarter was 88.0 percent, down from 89.6 percent in the year-ago period. The lower revenue efficiency was due to the replacement of original equipment manufacturer or OEM defective bolts in subsea well control equipment and other unrelated downtime, primarily on certain ultra-deepwater rigs.
Rig utilization in the quarter was 80 percent, compared to 74 percent in the prior-year period.
Transocean's first-quarter net income was $321 million or $0.88 per share, up sharply from $10 million or $0.03 per share in the previous-year quarter.
The latest quarter's results include net unfavorable items of $16 million or $0.05 per share, including $0.15 per share related to an adjustment in contingencies associated with the Macondo well incident and other items. These were partly offset by $0.10 per share associated with favorable discrete tax benefits.
The prior-year quarter's results include net unfavorable items of $255 million or $0.72 per share, primarily associated with goodwill impairment losses of $0.38 per share and losses associated with discontinued operations of $0.39 per share.
Adjusted earnings from continuing operations for the quarter were $337 million or $0.93 per share, compared to $265 million or $0.75 per share in the previous-year period. On average, thirty three analysts polled by Thomson Reuters expected the company to earn $1.00 per share for the quarter. Analysts' estimates typically exclude special items.
Total revenues for the quarter rose 4 percent to $2.20 billion from $2.11 billion in the same period last year. Analysts had a consensus revenue estimate of $2.36 billion.
Transocen said that based on preliminary analysis, it currently anticipates achieving annualized savings associated with this initial phase of our cost reduction initiative of about $300 million.
RIG closed Wednesday's regular trading session at $55.26, up $0.51 or 0.93 percent on a volume of 3.01 million shares. However, in after-hours, the stock declined $0.84 or 1.52 percent to $54.42.
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