Transocean Q4 Earnings on Deck: Here's How It Will Fare

Transocean Ltd. RIG is set to release fourth-quarter earnings on Feb. 19, after the closing bell. The Zacks Consensus Estimate for the to-be-reported quarter is pegged at 9 cents per share and the same for revenues is pinned at $1.04 billion.

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 Q3 Earnings & Surprise History

In the last reported quarter, the Switzerland-based oil and gas drilling company’s adjusted earnings of 6 cents per share beat the Zacks Consensus Estimate of 4 cents. This was attributed to robust performance from the RIG's segments. Adjusted revenues of $1 billion beat the Zacks Consensus Estimate by $21 million.

RIG’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed the remaining one, delivering an average negative surprise of 208.33%.

This is depicted in the graph below: 

Transocean Ltd. Price and EPS Surprise

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

Trend in Estimate Revision for RIG Stock

The Zacks Consensus Estimate for fourth-quarter 2025 earnings has remained unchanged in the past seven days. The estimated figure indicates a 200% year-over-year increase. The Zacks Consensus Estimate for revenues indicates an increase of 9.08% from the year-ago period’s actual.

Factors to Consider Ahead of RIG’s Q4 Release

Transocean generates revenues by offering offshore drilling services to oil and gas producers. The company leases highly specialized drilling rigs, along with equipment and skilled crews, to support offshore well drilling. Its fleet includes advanced rigs built for deepwater operations and harsh environments. Transocean earns income by charging energy companies and government clients for access to its rigs and related services.

RIG’s revenues are likely to have improved in the quarter to be reported. The Zacks Consensus Estimate for fourth-quarter revenues is expected to have increased from the year-ago quarter’s level. This can be attributed to the strong performance of the RIG's Ultra-Deepwater Floaters segment. As per our model, the Ultra-Deepwater Floaters segment is expected to grow 13.1% year over year, totaling $763.2 million.

On a bearish note, the increase in RIG’s costs might have dented its to-be-reported bottom line. Going by our model, RIG’s total operating and maintenance costs are likely to be up 4.3% year over year to $604 million in the fourth quarter.

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 -5.88%. 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 With the Favorable Combination

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

IPG Photonics Corporation IPGP, a US-based electronic manufacturing services provider,is scheduled to release earnings on Feb. 12. The firm has an Earnings ESP of +15.08% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

IPG Photonics is a global leader in high???performance fiber lasers and amplifiers used across industrial, medical and communications applications. The company generates revenues by providing advanced laser solutions that enable precision cutting, welding, marking and other manufacturing processes worldwide. IPG Photonics’ earnings missed the Zacks Consensus Estimate in three of the last four quarters and beat in the other one, resulting in an average surprise of 89.09%.

Applied Materials, Inc. AMAT, a US-based semiconductor materials & equipment provider, has an Earnings ESP of +3.06% and a Zacks Rank #2. The firm is scheduled to release earnings on Feb. 12. Applied Materials’ earnings beat the Zacks Consensus Estimate in each of the last four quarters, resulting in an average surprise of 4.17%.

The company is a leading global supplier of manufacturing equipment, services and software used to produce semiconductors, display panels and advanced electronic devices. Applied Materials plays a critical role in enabling chipmakers to advance technologies such as artificial intelligence, cloud computing and next-generation communications.

Expedia Group, Inc. EXPE has an Earnings ESP of +4.39% and a Zacks Rank #2. The firm is scheduled to release earnings on Feb. 12. Expedia Group’s earnings beat the Zacks Consensus Estimate in three of the last four quarters and missed in the other one, resulting in an average surprise of 4.53%.

The company is a leading global online travel platform that operates brands such as Expedia, Hotels.com, Vrbo and Orbitz. Expedia Group generates revenues by offering travel bookings for flights, hotels, vacation rentals, car rentals and activities, connecting millions of travelers with suppliers worldwide.

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

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