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Transocean's Bottom Line Benefits From Cost Controls

By Jeff Miller

 About this article:
 For Miller's preview heading into the Transocean conference call, please click here. Transocean reported first-quarter 2009 earnings of $3.75 per share, solidly beating expectations by 24 cents per share. Revenue of $3.12 billion was in line with consensus forecasts. The earnings reflected charges of 82 cents per share for impairment on two semisubmersible rigs, items related to the GlobalSantaFe merger and debt retirement. The two rigs are offered for sale, and the charge is a writedown to reflect current market value. The earnings beat was accomplished partly through cost controls. The company is aggressively stacking rigs that are not currently needed. These are mostly jackups and semisubmersibles. Over a period of one month, the company reduces crew and gets costs down to insurance and harbor charges. In terms of guidance, the company strongly defended the deepwater part of the business. In particular, the executive team showed that existing contracts...

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