10 Updates

Transocean Preview: Margins In Focus As Utilizations Expected To Remain Strong

Feb 25 2014, 1:03pm CST | by

Transocean is scheduled to announce its Q4 2013 earnings on February 26, reporting on a quarter that saw reasonably strong drilling activity worldwide. During Q3 2013, the company’s revenues...

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22 weeks ago

Transocean Preview: Margins In Focus As Utilizations Expected To Remain Strong

Feb 25 2014, 1:03pm CST | by

Transocean is scheduled to announce its Q4 2013 earnings on February 26, reporting on a quarter that saw reasonably strong drilling activity worldwide. During Q3 2013, the company’s revenues increased by around 5% year-over-year to $2.56 billion, while adjusted income from continuing operations before taxes rose by around 4% to $618 million. For Q4, we expect the company’s revenues to be driven by strong utilization rates as well as the relatively smooth operation of the company’s fleet. However, we will be closely watching the company’s progress in improving operating margins.

Trefis will be revisiting its $53 price estimate for Transocean following the company’s earnings release.

See Our Complete Analysis For Transocean Here

Operating Margins Are A Key Factor To Watch

Transocean is focused on the high end of the offshore drilling market, with its fleet geared towards high-specification floaters such as ultra-deepwater, deepwater and harsh environment rigs since they typically have the highest day rates. The company has been seeing relatively strong operating metrics as well. Utilization rates have largely stood at above 80% while revenue efficiency (a measure of the actual revenues a rig earns when contracted versus its maximum potential revenues) has also held up at over 93% over the last few quarters. However, the company’s profit margins have been something of a concern, especially when compared to competitors such as Seadrill. This is primarily due to the company’s higher maintenance costs and its relatively older fleet. Transocean’s typical rigs are roughly 9.5 years old, compared to Sea Drill and Ensco, whose rigs have an average age of less than four years.
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Transocean has been taking steps to improve its profitability by scaling down its shore-based support infrastructure following the sale of its jack-up rig fleet. The company has also been streamlining and consolidating some business functions while eliminating some of its non-core operations. Transocean says that these initiatives should help raise operating income by around $800 million by the end of FY 2015. During the third quarter, the company’s operating margins stood at roughly 29% compared to around 33% during the same period last year, due to higher operation and maintenance costs. We believe that the company’s ability to improve its margins will be a key catalyst for the stock in the near term, considering that revenues could come under pressure given the looming oversupply of deepwater rigs in the market (see Why Transocean’s Stock Has Been Trending Lower).

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Source: Forbes Business

 
Update
10

7 weeks ago

RM47mil KWSG contributions still unclaimed

Jun 9 2014 7:54am CDT | Source: Business Times Malaysia

KUALA LUMPUR: About RM47 million of contributions in the Teachers Provident Fund (KWSG) still remain unclaimed, the Dewan Ra ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
9

7 weeks ago

Gold shop lost almost RM1mil

Jun 9 2014 3:50am CDT | Source: Business Times Malaysia

KANGAR: A gold shop owner lost almost RM1 million after after the safe on in his shop was broken into by robber ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
8

7 weeks ago

Motion to debate MAS losses in Dewan Rakyat rejected

Jun 9 2014 3:39am CDT | Source: Business Times Malaysia

KUALA LUMPUR: AN emergency motion to debate the losses incurred by Malaysia Airlines last year, amounting to RM1.2 billion was rejected by the Dewan ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
7

7 weeks ago

MH370 Tragedy: Hisham: RM27.6 mil spent on 1st phase of SAR

Jun 9 2014 2:11am CDT | Source: Business Times Malaysia

KUALA LUMPUR: Malaysia spent some RM27.6 million in its first phase of the search operations for missing Malaysia Airline flight MH370, said Acting Transport Minister, ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
6

7 weeks ago

9.1m litres of diesel seized in a month

Jun 8 2014 1:11am CDT | Source: Business Times Malaysia

PUTRAJAYA: The Domestic Trade, Cooperatives, and Consumerism ministry has seized some 9.1 million litres of diesel and property worth RM58 million since mounting ‘Operasi Diesel Selatan’ in the southern states last m ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
5

7 weeks ago

Girl, 9, awarded RM2.78m compensation for medical negligence

Jun 6 2014 4:56am CDT | Source: Business Times Malaysia

KUALA LUMPUR: A nine-year-old girl who suffered brain damage during her birth at a government hospital was awarded over RM2.78 million in compensa ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
4

7 weeks ago

Malaysia's total trade in April up 12pc

Jun 5 2014 11:52pm CDT | Source: Business Times Malaysia

KUALA LUMPUR: Malaysia's total trade in April 2014 rose by 12 per cent from a year ago to RM123.86 billion due to growing trading activities, International Trade and Industr ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
3

7 weeks ago

Works Ministry to spend RM20m for upgrading works at 50 accident black spots

Jun 4 2014 11:35pm CDT | Source: Business Times Malaysia

JOHOR BARU: The Works Ministry will implement upgrading works at 50 accident prone locations in the country that have been identified this year involving an alloca ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
2

7 weeks ago

Najib launches loan scheme for Ramadan traders

Jun 4 2014 10:24pm CDT | Source: Business Times Malaysia

PUTRAJAYA: Prime Minister Datuk Seri Najib Razak today launches RM45 million Ramadan Bazaar Schem ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
1

8 weeks ago

Residents bring up objection against Kidex to Suhakam

Jun 4 2014 4:49am CDT | Source: Business Times Malaysia

PETALING JAYA: A group of 20 Petaling Jaya residents held a meeting with the Human Rights Commission of Malaysia (Suhakam) over their objection against the proposed RM2.2 billion Ki ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 

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