Transocean Ltd. (NYSE: RIG) – Q1 FY 2011 Earnings Preview
Tuesday, May 03, 2011 3:45 PM

Transocean Ltd. (NYSE: RIG) is expected to report its first quarter FY 2011 financial results after the closing bell on May 4, 2011. Transocean Ltd. is the world's largest offshore drilling contractor and the leading provider of drilling management services worldwide.

For Q4 FY 2011:

  • Transocean reported revenue of $2.16 billion for the quarter, down 6 percent, compared with revenue of $2.31 billion in the fourth quarter FY 2010.
  • The company reported a net loss of $799 million, or $2.51 per share, compared with net income of $723 million, or $2.24 per diluted share, for the same quarter last year.
  • The fourth quarter results of the company were adversely affected by $1.017 billion of after tax items.
  • The company's reported EPS missed analysts' consensus estimate by a margin of 23.60 percent.

For full year 2010, net income reported was $961 million, or $2.99 per diluted share, compared with net income of $3.1 billion, or $9.84 per diluted share, in the FY 2009. Net income for the year included after-tax charges of $854 million, or $2.65 per diluted share, resulting primarily from a $1.010 billion impairment of some equipment. Revenue for the year was $9.56 billion, down 17 percent, compared with revenue of $11.5 billion in FY 2009.

During the first quarter, Transocean announced the schedule for the first installment of its proposed dividends of approximately $1 billion to be paid out of additional paid-in capital. The first installment is expected to be $0.79 per share, or approximately $252.4 million total, based on the current number of the company's outstanding shares. In February, the company's board of directors recommended that shareholders approve the proposed dividend. The proposed dividend is contingent on shareholders rescinding at the meeting a previously approved U.S. $1 billion distribution in the form of a par-value reduction, as well as shareholder approval of the proposal to carry forward available earnings.

For the first quarter, analysts' EPS estimates range from $0.47 to $1.42 per share, compared with consensus estimates of $0.80 per share, or $2.22 per share, in the year ago quarter. For this quarter, analysts' revenue estimates range from $2.08 billion to $2.48 billion, compared with a consensus estimate of $2.25 billion to $2.60 billion in the same quarter a year ago. For the quarter ended March, 2011, the consensus EPS forecast has been increased from $0.79 per share estimated 7 days ago to the current estimate of $0.80 per share. The last trading price of the stock was $70.44, down 2.31 points, or 3.18 percent, on Tuesday. Analysts at Canaccord brokerage firm initiated the stock with a hold rating on April 29, 2011.



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