RIG - Transocean: Things Are Looking Up

2024-07-16 16:42:02 ET

Summary

• Transocean's financial performance has improved, with revenue up 17.6% and its net loss turning into a gain of $98 million.
• Backlog has declined slightly, but recent contract wins and high spot rates for offshore rigs bode well for the company.
• Management has made moves to improve the debt picture, including buying back high-interest notes and issuing new debt at lower rates.
• But until backlog starts to rise again, it's too early to turn bullish.

The last couple of months have not been particularly pleasant for oil rig owner Transocean ( RIG ). Back in late March of last year, I wrote an article about the company wherein I rated it a "hold." At the time, I mentioned that the picture for the business was looking up. Average revenue per day was growing, and the net debt picture for the company had improved ever so slightly. Backlog was, admittedly, starting to fall. But because of how cheap shares were and the longer-term outlook for demand in its space, I felt as though the picture no longer looked bad....

For further details see: