Transocean Q4 Earnings & Sales Surpass Estimates, Both Rise Y/Y

Transocean Ltd. RIG reported fourth-quarter 2025 a bottom line of 2 cents, which beat the Zacks Consensus Estimate of breakeven adjusted earnings. The bottom line also improved from the year-ago period’s reported loss of 19 cents. This improvement was driven by higher revenues, improved fleet utilization, better revenue efficiency and strong performance from RIG’s harsh environment floaters.

This Switzerland-based offshore drilling powerhouse’s total adjusted revenues of $1 billion beat the Zacks Consensus Estimate by $5 million. The top line also increased 1.5% from the prior-year figure. This was due to higher-than-expected revenues from ultra-deepwater and harsh environment floaters. Ultra-deepwater and harsh environment revenues beat the consensus mark of $715 million and $265 million, respectively.

Transocean Ltd. Price, Consensus and EPS Surprise

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

Transocean’s Segmental Revenue Breakup

Transocean’s ultra-deepwater floaters contributed 69.4% to net contract drilling revenues, while harsh environment floaters accounted for the remaining 30.6%.

Revenues from the ultra-deepwater and harsh environment floaters totaled $724 million and $319 million, respectively, compared with the year-ago quarter’s reported figures of $675 million and $277 million.

Revenues from ultra-deepwater operations were down from the model estimate of $763.2 million, while those from harsh environment operations exceeded the prediction of $268.6 million.

Revenue efficiency was 96.2%, down from 97.5% in the previous quarter but up from 93.5% in the year-ago quarter.

RIG’s Day Rates, Utilization & Backlog         

Average day rates in the reported quarter increased to $461,300 from $434,700 in the year-ago quarter. However, the figure marginally missed the Zacks Consensus Estimate of $461,700.

Average revenues per day from ultra-deepwater floaters increased to $466,000 from $428,200 in the year-ago quarter. However, the same from harsh environment floaters decreased to $449,800 from $452,600 in the prior-year quarter.

Fleet utilization rate was 85.8% in the quarter, which increased from the prior-year period’s 66.8%.

As of Feb. 19, 2026, Transocean’s total backlog was $6.1 billion.

RIG’s Costs, Capex & Balance Sheet

This Zacks Rank #3 (Hold) company reported costs and expenses of $802 million, which were 1.6% lower than the year-ago quarter’s level of $815 million. Additionally, operations and maintenance costs increased to $605 million from $579 million a year ago.

The oil and gas drilling company spent $28 million on capital investments in the fourth quarter. Cash used in operating activities was $349 million. Cash and cash equivalents were $620 million as of Dec. 31, 2025. Long-term debt amounted to $5.2 billion, with a debt-to-capitalization of 39.1% as of the same period.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Q1 and 2026 Guidance for Transocean

For the first quarter of 2026, the company expects contract drilling revenues in the range of $1.02 billion to $1.05 billion. This outlook assumes a fleet-wide revenue efficiency of 96.5%. Operating and maintenance expenses are projected to be between $605 million and $625 million, while general and administrative expenses are expected to range from $40 million to $50 million.

The company expects $125 million in interest expense, while interest income is projected to be a loss of $5 million to $10 million. Capital expenditures are estimated at $35 million to $45 million and cash taxes paid are expected to be around $15 million during the same period.

For full-year 2026, the company expects contract drilling revenues of $3.8 billion to $3.95 billion, with a fleet-wide revenue efficiency of 96.5%. Operating and maintenance expenses are projected to range from $2.25 billion to $2.38 billion, while general and administrative expenses are forecasted between $170 million and $180 million. The company expects $480 million in interest expense, while interest income is projected to be a loss of $30 million to $35 million.

Full-year capital expenditures are estimated at approximately $130 million. Cash taxes paid are expected to range from $85 million to $90 million. The company also expects year-end liquidity of $1.6 billion to $1.7 billion.

Important Energy Earnings at a Glance

While we have discussed RIG’s fourth-quarter results in detail, let us take a look at three other key reports in the energy space.

Valero Energy Corporation VLO, a leading independent refiner and marketer of transportation fuels and petrochemical products, posted fourth-quarter 2025 adjusted earnings of $3.82 per share, which beat the Zacks Consensus Estimate of $3.22. The bottom line improved from the year-ago quarter’s level of 64 cents. The better-than-expected quarterly results can be mainly attributed to a surge in refining margins, higher ethanol production volumes and lower total cost of sales.

Valero Energy had cash and cash equivalents of $4.7 billion at the end of the fourth quarter. As of Dec. 31, 2025, it had total debt of $8.3 billion and finance lease obligations of $2.4 billion.

Baker Hughes Company BKR, a Houston, TX-based oil and gas equipment and services provider, posted fourth-quarter 2025 adjusted earnings of 78 cents per share, which beat the Zacks Consensus Estimate of 67 cents. The bottom line also increased from the year-ago level of 70 cents. The strong quarterly results were primarily driven by solid performance from BKR’s Industrial & Energy Technology business segment.

Baker Hughes Company’s net capital expenditure in the fourth quarter was $321 million. As of Dec. 31, 2025, it had cash and cash equivalents of $3.7 billion. BKR had a long-term debt of $5.4 billion at the end of the reported quarter, with a debt-to-capitalization of 24.3%.

Another Houston, TX-based oil and gas equipment and services provider, Halliburton Company HAL, posted fourth-quarter 2025 adjusted net income per share of 69 cents, beating the Zacks Consensus Estimate of 54 cents. The outperformance primarily reflects successful cost reduction initiatives. However, the bottom line marginally fell from the year-ago adjusted profit of 70 cents due to softer activity in the North American region.

Halliburton reported fourth-quarter capital expenditure of $337 million, well below our projection of $390.4 million. As of Dec. 31, 2025, the company had approximately $2.2 billion in cash and cash equivalents, and $7.2 billion in long-term debt, representing a debt-to-capitalization ratio of 40.5.

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