Transocean Ltd (NYSE:RIG) reported a net loss of $220 million, or $0.28 per diluted share, for Q3 2023. After adjusting for net favorable items of $60 million, the net loss amounted to $280 million. The company's contract drilling revenues fell to $713 million due to idle time on ultra-deepwater floaters including Deepwater Titan and Transocean Norge, and lower revenue from four other rigs.
Operating and maintenance expenses rose to $524 million due to higher shipyard costs and contract preparation for seven rigs. Interest expense also increased to $232 million, with the effective tax rate rising to 16.3%. Cash used in operating activities fell by $201 million to $44 million, while capital expenditures decreased from $76 million to $50 million.
Despite these challenges, Transocean increased its backlog for the seventh consecutive quarter to $9.4 billion. CEO Jeremy Thigpen underscored the company's leadership in the high-specification, ultra-deepwater drilling market, its industry-leading backlog size, a three-year contract for Deepwater Aquila in Brazil which is a 1400 short ton, dual activity, seventh generation drillship, and the acquisition of Liquila Ventures Ltd.
InvestingPro Insights
Transocean Ltd (NYSE:RIG) has been under the microscope of InvestingPro, with a few key points to note. Despite a significant debt burden, the company's liquid assets exceed its short term obligations, providing some level of financial security. However, the company has not been profitable over the last twelve months, and analysts do not anticipate it will be profitable this year. This is reflected in the negative P/E ratio of -4.18, indicating the market has low expectations for earnings growth. The stock has also been in oversold territory recently, as indicated by the RSI, which could signal a potential buying opportunity.
InvestingPro data shows a market cap of $5250M USD, with revenue for the last twelve months as of Q2 2023 at $2675M USD, indicating a slowing growth rate. The return on assets for the same period was at -4.95%, underlining the company's struggle to generate profit from its assets.
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