Sectors

Swiss Drilling Company Transocean Posts Profit Despite Poor Oil Price

February 25
8:10 AM 2016

Transocean Ltd., a Swiss-based drilling company, announced its fourth quarter earnings results that outstripped analysts' earnings outlook for the company. The company posted a net profit of $617 million during the last three-month period of 2015, compared to a net loss of $766 million in the previous year period.

Net profit attributable to controlling interest amounted to $611 million in the fourth quarter of 2015, compared to a net loss of $739 million in the year-ago period. Transocean reported quarterly earnings per share of $1.66, compared to a loss of $2.04 per share in the same period in 2014.

On an adjusted basis, net income for the fourth quarter increased to $615 million, or $1.68 per share from $344 million, or $0.95 per share last year. Profit from continuing operations totalled $617 million, or $1.66 per share, compared to a loss of $762 million, or $2.03 per share in the previous year period. Profit from continuing operations, excluding tax expenses, was $683 million during the reporting period, compared to a loss of $752 million in the prior year period.

The quarterly operating profit amounted to $750 million, compared to a loss of $647 million in the year-ago period. However, operating revenues decreased to $1.85 billion from $2.24 billion in the fourth quarter of 2014.

Analysts polled by FactSet had anticipated earnings, on an adjusted basis, to be $0.71 per share on revenues of $1.41 billion. The company managed to beat Wall Street estimation by trimming operating and other corporate maintenance costs by 39%, MarketWatch said.

For the year ended December 31, 2015, the drilling firm posted net income of $826 million, compared to a loss of $1.97 billion in the previous year. Annual net income attributable to controlling interest amounted to $791 million, compared to a loss of $1.91 billion in 2014. Earnings per share were $2.16 during the year 2015, compared to a loss of $5.29 per share last year.

Profit from continuing operations totalled $824 million, or $2.16 per share, in 2015, compared to a loss of $1.95 billion, or $5.23 per share in the previous year. Profit from continuing operations, excluding income tax, amounted to $1.03 billion, compared to a loss of $1.8 billion in 2014.

Adjusted net income decreased to $1.74 billion, or $4.74 per share from $1.8 billion, or $4.94 per share in the prior year. The company's annual operating profit totalled $1.4 billion, compared to a loss of $1.38 billion in the year 2014. Operating revenues declined to $7.4 billion from $9.2 billion in the previous year.

In early February, the driller said that 21 of its rigs became inactive and nearly 6 of its rigs remained idle. In addition, Statoil and Royal Dutch Shell cancelled their contracts with the company in December, as reported by Real Money. The shares of the company increased more than 8% during the after-hours trading session following the earnings report.

Transocean managed to post a profit during the fourth quarter of 2015 amid weak oil prices and global financial crisis. The company credited its earnings achievement to its team members who aided Transocean to boost its balance sheet.

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