In fiscal 4Q15, analysts expect $0.72 adjusted net earnings per share (or EPS) for Transocean (RIG). This means Wall Street analysts expect Transocean’s earnings to fall 22% from the 3Q15 adjusted EPS of $0.93. A lower day rate, lower rig utilization, and a lower rig count may result in Transocean’s earnings falling. The company is expected to release its fiscal 4Q15 results on February 24.
Transocean’s adjusted earnings trended down from 2Q14 through 3Q15. During this period, its adjusted EPS fell 42%. A falling rig count, rig scrapping, and a lower average day rate negatively affected Transocean’s bottom line.
Transocean’s earnings versus estimates
In fiscal 3Q15, Transocean’s adjusted EPS fell short of analysts’ consensus EPS by 6.5%. As the graph above shows, Transocean’s adjusted EPS exceeded estimates in many past quarters. On average, adjusted EPS exceeded consensus EPS by ~30% over the past 11 quarters.
Superior Energy Services (SPN), Transocean’s peer in the oilfield services and equipment provider industry, reported an $821 million fiscal 3Q15 net loss compared to Transocean’s $321 million reported net income. RIG is 3.1% of the VanEck Vectors Oil Services ETF (OIH), an ETF-tracking index of 25 oilfield companies.
Next, we’ll discuss Transocean’s value drivers.