Transocean Ltd. RIG is set to release fourth-quarter earnings on Feb. 17, after the closing bell. The Zacks Consensus Estimate for the to-be-reported quarter is pegged at 2 cents per share and the same for revenues is pinned at $958.06 million.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

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 beat the consensus mark. RIG posted breakeven adjusted earnings per share, which beat the Zacks Consensus Estimate of a loss of 4 cents. This was attributed to robust performance from RIG's segments.  Adjusted revenues of $948 million also beat the Zacks Consensus Estimate by 1.3%.

RIG’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed the remaining one, delivering an average surprise of 37.13%. This is depicted in the graph below: 

Trend in Estimate Revision for RIG Stock

The Zacks Consensus Estimate for fourth-quarter 2024 earnings has remained unchanged in the past seven days. The estimated figure indicates a 28.08% year-over-year increase. The Zacks Consensus Estimate for revenues indicates an increase of 122.22% from the year-ago period’s actual.

Factors to Consider Ahead of RIG’s Q4 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. RIG 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. Our model predicts fourth-quarter revenues to increase to $960 million from the year-ago quarter’s level of $748 million. This can be attributed to the strong performance of RIG's segments.

The Ultra-Deepwater Floaters segment is expected to have grown 26.8% year over year, totaling $679.8 million. Meanwhile, the Harsh Environment Floaters segment is anticipated to have increased 36.7% year over year, amounting to $280.2 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 have gone up 2.2% year over year to $820.6 million in the fourth quarter. Operating and Maintenance Costs are expected to have risen 2.8% year over year, reaching $584.9 million. Meanwhile, General and Administrative expenses are anticipated to have increased 2.3% year over year, amounting to $51.2 million. The upward cost trajectory can be attributed to the ongoing inflationary environment and tight labor market.

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 -136.36%. 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.

CNX Resources CNX has an Earnings ESP of +3.60% and a Zacks Rank 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Valued at around $4.57 billion, CLMT’s shares have gained 49.3% in a year. Notably, the Zacks Consensus Estimate for CNX’s 2025 earnings per share indicates 4.18% year-over-year growth.

Calumet, Inc. CLMT has an Earnings ESP of +7.11% and a Zacks Rank #2.  Valued at around $1.39 billion, CLMT’s shares have gained 1% in a year.

Notably, the Zacks Consensus Estimate for CLMT’s 2025 earnings per share indicates 104.46% year-over-year growth.

California Resources CRC has an Earnings ESP of +2.59% and a Zacks Rank #3. The firm is scheduled to release earnings on March 3.

CRC’s earnings beat the consensus estimate in each of the trailing four quarters, delivering an average surprise of 13.11%. Valued at around $4.44 billion, CRC’s shares have lost 9.9% in a year.

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Transocean Ltd. (RIG) : Free Stock Analysis Report

CNX Resources Corporation. (CNX) : Free Stock Analysis Report

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California Resources Corporation (CRC) : Free Stock Analysis Report

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