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Energy

Transocean Misses the Mark (RIG, DO, SLB)

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By Douglas A. McIntyre Updated Published
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Transocean Ltd. (NYSE:RIG) followed in the footsteps of competitors Diamond Offshore Drilling Inc. (NYSE: DO) and Schlumberger Ltd. (NYSE: SLB), reporting fourth quarter and full-year results that missed expectations. Transocean announced net income for the quarter of $800 million (EPS of $2.50) on revenue of $3.27 billion. Analysts had expected EPS of $3.70 on revenue of $3.29 billion.

For the year, Transocean reported net income of $4.20 billion (EPS of $13.09) on revenue of $12.67 billion, while analysts expected EPS of $14.34 on revenue of $12.62 billion. Average day rates at the end of the year had increased from $242,000 at the end of the third quarter to $251,500.

To counter the bad news, Transocean yesterday announced that it would seek shareholder approval to repurchase up to $3.02 billion worth of outstanding shares. That seems like a waste of money, especially given the $400 million in charges that the company took in the fourth quarter.

Transocean did not provide any guidance or backlog information, so it’s hard to figure out where the company’s going in the next 12 months. Investors appear to believe it’s going south, as pre-open trading has moved the share price down by about 3%.

Paul Ausick
February 17, 2009

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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