Transocean Ltd.'s (RIG, RIGN.VX) third-quarter loss widened as asset impairment and other items masked the offshore-drilling company's revenue growth.
Transocean Ltd.'s (RIG, RIGN.VX) third-quarter loss widened as asset
impairment and other items masked the offshore-drilling company's revenue
growth.
Transocean owned the Deepwater Horizon, the rig that exploded and sank in the
Gulf
of Mexico
in 2010, killing 11 people and setting off the
worst offshore oil spill in
U.S.
history. The company faces potentially costly litigation with BP PLC (BP,
BP.LN) and the
U.S.
government over the spill and has allocated about $2 billion to cover the
possible liability.
In September, Transocean was awarded 10-year contracts for four new drillships
by oil giant Royal Dutch Shell PLC (RDSA), which will contribute about $7.6
billion in revenue from 2015 and 2016. Transocean also earlier agreed to sell
38 shallow-water-drilling rigs for $1.05 billion as part of a plan to focus on
the higher end of the offshore-drilling market.
Transocean's revenue has improved in recent quarters, although its bottom line
continues to be hurt by loss contingencies associated with the Macondo well
incident.
For the latest period, Transocean reported a loss of $381 million, or $1.06 a
share, compared with a year-earlier loss of $32 million, or 10 cents a share. Excluding
asset impairment, asset-sale gains and other items, adjusted per-share earnings
from continuing operations rose to $1.37 from 11 cents. Revenue increased 23%
to $2.44 billion.
Analysts polled by Thomson Reuters had projected a per-share profit of 76 cents
and revenue of $2.53 billion.
Average daily revenue climbed 2.9% from the prior year and slipped 2.3% from
the quarter earlier. Fleet utilization rate was 73%, up from 58% a year ago and
66% in the previous quarter.
A Brazilian court at the end of September partially lifted an
injunction--resulting from a 2011 oil spill at a Chevron Corp. (CVX)
field--that would have banned Transocean from operating in
Brazil
. Transocean's
contracts in the South American country accounted for about 11% of its
operating revenue in the first half of the year.
Shares were trading about 2% higher at $47 premarket. The stock is up about 20%
through Friday's close.
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