Transocean to Report Q2 Earnings: What's in the Offing for the Stock?

Transocean Ltd. RIG is set to release second-quarter 2025 earnings on Aug. 4, after the closing bell.  The Zacks Consensus Estimate for the to-be-reported quarter is pegged at a loss of 1 cent per share on revenues of $968.1 million.

Let us delve into the factors that might have influenced RIG’s performance in the to-be-reported quarter. Before that, it is worth taking a look at the company’s performance in the last reported quarter.

Highlights of Q1 Earnings & Surprise History

In the last reported quarter, the Switzerland-based oil and gas drilling company’s adjusted net loss of 10 cents per share was narrower than the Zacks Consensus Estimate of a loss of 12 cents. Additionally, adjusted revenues of $906 million beat the Zacks Consensus Estimate of $886 million.

RIG’s earnings beat the Zacks Consensus Estimate in two of the trailing four quarters and missed in the remaining two, delivering an average negative surprise of 242.7%.

This is depicted in the graph below: 

Transocean Ltd. Price and EPS Surprise

Transocean Ltd. price-eps-surprise | Transocean Ltd. Quote

Trend in RIG’s Estimate Revision

The Zacks Consensus Estimate for RIG’s second-quarter earnings has not witnessed any movement over the past 30 days. The estimated figure indicates 93.33% year-over-year growth. The Zacks Consensus Estimate for revenues indicates growth of 12.44% from the year-ago period’s $861 million.

Factors to Consider Ahead of RIG’s Q2 Release

Transocean makes money by providing drilling services for oil and gas companies. It rents out specialized offshore drilling rigs, equipment and workers to help these companies drill wells in the ocean. The company operates a fleet of advanced drilling units, including ones designed for deepwater and rough conditions. Transocean earns revenues by charging customers (like big energy companies and governments) for the use of its rigs and services.

RIG’s revenues are likely to have improved in the quarter to be reported, attributed to the strong performance of its segments. For instance, the Ultra-Deepwater Floaters segment is projected to experience a substantial 16.1% year-over-year expansion, reaching a total of $703.5 million. Furthermore, the Harsh Environment Floaters segment is expected to have contributed significantly, with an anticipated 5.1% year-over-year surge, amounting to $267.9 million.

On a bearish note, the increase in RIG’s costs might have dented its to-be-reported quarter’s bottom line. Going by our model, RIG’s total costs and expenses are likely to be up 11% year over year to $862.7 million in the second quarter.

Breaking this down further, Operating and Maintenance (O&M) costs are expected to see a substantial rise of 15% year over year, reaching $614.3 million. Simultaneously, depreciation and amortization expenses are also anticipated to increase 10.5% year over year, amounting to $203.3 million.

What Does Our Model Say About RIG?

Our proven model does not predict an earnings beat for Transocean this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is not the case here.

RIG’s Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, for this company is 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

RIG’s Zacks Rank:  RIG currently carries a Zacks Rank #3.

Stocks to Consider

Here are some firms from the energy space that you may want to consider, as these have the right combination of elements to post an earnings beat this reporting cycle.

MPLX LPMPLX has an Earnings ESP of +1.36% and a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

MPLX is scheduled to release earnings on Aug. 5. Notably, the Zacks Consensus Estimate for MPLX’s 2025 earnings per share indicates 6.4% year-over-year growth. Valued at around $52 billion, MPLX’s shares have gained 20.1% in a year.

Permian Resources Corporation PR has an Earnings ESP of +3.51% and a Zacks Rank #3. PR is slated to release earnings on Aug. 6.

The Zacks Consensus Estimate for PR’s 2025 revenues indicates 5.5% year-over-year growth. Valued at around $11.5 billion, PR’s shares have lost 4.9% in a year.

Canadian Natural Resources Limited CNQ has an Earnings ESP of +14.50% and a Zacks Rank #3. CNQ is slated to release earnings on Aug. 7.

The Zacks Consensus Estimate for Canadian Naturals’ 2025 revenues indicates 4.6% year-over-year growth. Valued at around $66.8 billion, CNQ’s shares have lost 5.7% in a year.

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This article originally published on Zacks Investment Research (zacks.com).

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