Transocean (NYSE:RIG) shares jumped in the early session today after the offshore drilling solutions provider announced its results for the fourth quarter. While revenue increased by 22.3% year-over-year to $741 million, the figure still landed short of estimates by $16.7 million. On the other hand, net loss per share of $0.09 outpaced expectations by a wide margin of $0.14.
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In Q4, RIG’s revenue efficiency (operating revenue excluding revenue from contract terminations and reimbursements) improved by 1.6% sequentially to 97%. The improved revenue efficiency and higher average daily revenue contributed to the company’s top-line surge. Further, its adjusted net loss moderated to $74 million from $280 million in Q3.
Notably, RIG improved its backlog by $3.2 billion in 2023 to $9.01 billion. Additionally, higher collections from customers helped the company significantly improve its cash flow from operations by $142 million to $98 million in Q4. Jeremy Thigpen, the CEO of Transocean, commented on the industry trends, “We remain encouraged by the continued tightness in the market and remain focused on delivering value to our shareholders as we progress through what we expect to be a multi-year upcycle.”
Is RIG a Good Stock to Buy?
Overall, the Street has a Moderate Buy consensus rating on Transocean. Following a nearly 40% decline in the company’s share price over the past six months, the average RIG price target of $8.42 implies a mouth-watering 72.2% potential upside in the stock.
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