Why Transocean Stock Is Sinking Tuesday

Transocean Ltd RIG shares are trading lower Tuesday in the wake of the company’s first-quarter financial results. Here’s a rundown of the report.

What To Know: Transocean reported first-quarter revenue of $763 million, which missed the consensus estimate of $787.043 million, according to Benzinga Pro. The company reported an adjusted earnings loss of 3 cents per share, which beat estimates for a loss of 14 cents per share.

“Over the first months of 2024, Transocean has achieved some fairly significant milestones. First, we secured a 365-day extension on Deepwater Asgard at a rate of $505,000 per day, once again demonstrating the sustained tightness in the high-specification floater market as well as Transocean’s ability to command industry-leading dayrates,” said Jeremy Thigpen, CEO of Transocean.

“Additionally, earlier this month we finalized a $1.8 billion debt refinancing transaction, enabling us to improve near-term liquidity and start the process of simplifying our balance sheet.”

Operating and maintenance expenses totaled $523 million, compared with $569 million in the prior quarter. Transocean said the sequential decrease was primarily due to cost savings on rigs that were idle in the first quarter, reduced contract preparation expenses and lower in-service maintenance costs.

“Looking ahead, we remain encouraged by the demand outlook and expect to see numerous long-term contracts awarded over the next several months,” Thigpen added.

Following the print, Benchmark analyst Kurt Hallead reiterated Transocean with a Buy rating and maintained a price target of $8.

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RIG Price Action: Transocean shares were down 11.4% at $5.16 at the time of publication, according to Benzinga Pro.

Photo: nattapon supanawan/Shutterstock.