* Q3 loss of 22 cents/shr vs profit of $1.15/shr year ago
* Revenue down 2 pct, costs up 28 pct from year ago
* Shares drop 7 percent after hours
By Braden Reddall
Nov 2 Transocean Ltd , the
largest offshore drilling contractor, reported on Wednesday an
unexpected quarterly loss on a rise in shipyard costs, knocking
another 7 percent off its battered shares.
It has now failed to meet Wall Street's expectations for
the past six quarters, since the Gulf of Mexico well blowout
that destroyed a Transocean rig triggering an oil spill that
shook up the entire U.S. offshore drilling industry.
Transocean's operating and maintenance costs were $1.54
billion in the third quarter, up 3 percent from the previous
period and 28 percent from a year ago, primarily due to
repairs, equipment certification and shipyard work.
Its third-quarter net loss was $71 million, or 22 cents per
share, compared with a profit of $368 million, or $1.15 per
share, a year ago. Revenue fell 2 percent to $2.24 billion,
below analysts' average estimate of $2.36 billion, according to
Thomson Reuters I/B/E/S.
"When you miss by that much, it's a surprise," said Brian
Youngberg, an analyst at Edward Jones, adding that costs were
$100 million over his estimate.
Despite Transocean's dividend and the industry's generally
positive outlook for next year, Youngberg believes investors
will grow even more wary of the stock, which has underperformed
its peers so far this year.
The rates paid by clients for rigs have generally improved
in the past year. But the second quarter proved a false dawn
for the key Transocean metric of revenue efficiency, which is
revenue actually booked out of the total that could have been
Revenue efficiency in the third quarter fell below 90
percent, reversing a rise to 92 percent that was deemed merely
good progress on the way back toward the 94 percent of 2009.
Diamond Offshore Drilling Inc managed to beat profit
estimates last month, though partly at the expense of its
fourth quarter, while rival Noble Corp overcame
disappointing numbers with an upbeat outlook.
Ensco Plc , London-based owner of the second-largest
offshore rig fleet, is due to report its financial results
overnight, while Seadrill's are due at the end of
Transocean and Ensco will hold conference calls with
investors and analysts on Thursday to discuss their results.
Shares of Switzerland-based Transocean were down 7 percent
at $52.03 in after-hours trading on the New York Stock
Exchange, following the release of the results.
Transocean had lost a fifth of its value in 2011, while
Diamond is down 4 percent, and Ensco has shed 9 percent.
The company is locked in a legal dispute with BP Plc
over liability for the Macondo disaster that destroyed its
Deepwater Horizon rig in the Gulf of Mexico in April 2010. On
Tuesday, Transocean asked a U.S. judge to order BP to cover all
the damages and costs arising from the resulting spill.