Transocean Ltd. (RIG) reported worse-than-expected Q2 results, lagging both earnings and revenue estimates. Shares of the offshore drilling contractor for oil and gas wells were down 2% in pre-market trading on Tuesday at the time of writing.
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An adjusted loss of $0.17 per share fell a cent short of analysts’ expectations for a loss of $0.16 per share. The company reported a loss of $0.81 per share in the prior-year period.
Revenues remained flat sequentially at $656 million and lagged consensus estimates of $675.89 million. (See RIG stock charts on TipRanks)
The company reported revenue efficiency of 98% versus 97% in the prior-year quarter. Operating and maintenance expenses decreased to $434 million, compared to $525 million in the prior-year period.
Transocean CEO Jeremy Thigpen commented, “As we enter the back half of this year, we remain encouraged by the upcycle that is currently unfolding. Assuming oil prices remain supportive, we see utilization and dayrates for our ultra-deepwater assets materially improving as we move into 2022.”
Morgan Stanley analyst Connor Lynagh recently increased the price target on Transocean from $3.50 to $4 (10.8% upside potential) and reiterated a Hold rating.
Overall, the stock has a Hold consensus rating based on 3 Holds. The average Transocean price target of $3.75 implies 3.9% upside potential from current levels. Shares of RIG have jumped 70% over the past year.
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