Transocean Ltd. RIG reported a second-quarter 2026 adjusted earnings of 3 cents per share, beating the Zacks Consensus Estimate of 1 cent. The bottom line also improved from the year-ago quarter’s breakeven adjusted earnings. The outperformance was supported by exceptional performance of the Harsh environment floaters that delivered higher revenues, stronger fleet utilization, improved revenue efficiency and higher average daily revenues.
The Switzerland-based offshore drilling contractor’s contract drilling revenues of $966 million surpassed the Zacks Consensus Estimate of $939 million by 2.9%. This was backed by higher-than-expected revenues from harsh environment floaters, which beat the consensus mark of $274.3 million. However, the top line decreased 2.2% from the year-ago quarter’s reported figure of $988 million due to lower revenues from the Ultra-deepwater floaters.
Adjusted EBITDA was $312 million, down from $344 million in the year-ago period and $440 million in the first quarter of 2026. However, the figure beat our model estimate of $260.9 million. Adjusted EBITDA margin was 32.2% compared with 34.9% in the year-ago quarter and 40.7% in the prior quarter.
RIG’s Q2 Segmental Revenue Breakup
Ultra-deepwater floaters accounted for about 64.5% of total contract drilling revenues, while harsh environment floaters contributed the remaining 35.5%.
Transocean’s ultra-deepwater floaters generated revenues of $623 million in the reported quarter, down from $699 million in the year-ago period and $748 million in the prior quarter. Moreover, the figure missed our model estimate of $665 million.
Harsh environment floaters contributed $343 million, compared with $289 million in the year-ago quarter and $333 million in the first quarter of 2026. Moreover, the figure beat our model estimate of $274.3 million.
Revenue efficiency was 97%, down from 97.3% in the previous quarter but up from 96.6% in the year-ago period. Ultra-deepwater revenue efficiency reduced to 95.7% from 96.7% a year ago, while harsh environment revenue efficiency came in at 99.5%, improving both sequentially and year over year.
Day Rates, Utilization & Backlog
Average daily revenues increased to $472,500 from $458,600 in the year-ago quarter but decreased from $475,600 in the prior quarter. The figure beat our estimate of $443,900.
Average daily revenues from ultra-deepwater floaters decreased to $455,500 from $457,200 a year ago. However, the figure beat our estimate of $446,800. The metric for harsh environment floaters increased to $510,000 from $462,400 in the prior-year quarter. The figure also beat our estimate of $437,200.
Fleet utilization improved to 78.2% from 67.3% in the year-ago period. Ultra-deepwater utilization was 72.6%, while harsh environment utilization reached 94.2%.
As of Aug. 5, 2026, Transocean’s total backlog was approximately $6.7 billion. Since its May 2026 fleet status report, the company added five new fixtures, representing nearly $292 million of incremental backlog at a weighted average day rate of about $461,000.
RIG’s Costs, Capex & Balance Sheet
The company reported costs and expenses of $812 million, which were 1.3% lower than the year-ago quarter’s level of $823 million. Additionally, depreciation and amortization costs decreased to $148 million from $175 million a year ago.
The oil and gas drilling company spent $24 million on capital investments in the second quarter. Cash used in operating activities was $236 million. Cash and cash equivalents were $509 million as of June 30, 2026. Long-term debt amounted to $4.7 billion, with a debt-to-capitalization of 36.1% as of the same period.
RIG’s Q3 & 2026 Guidance
For the third quarter of 2026, this Zacks Rank #3 (Hold) company expects contract drilling revenues in the range of $920-$960 million. Fleet-wide revenue efficiency is projected at 96.5%. Operating and maintenance expenses are expected to be between $595 million and $625 million, while general and administrative expenses are projected at $45 million. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The company expects $113 million in interest expense, while interest income is projected to be $5 million to $10 million. Capital expenditures are estimated at $40 million to $50 million and cash taxes paid are expected to be between $25 million and $30 million during the same period.
For the full-year 2026, RIG expects contract drilling revenues to be between $3900 million and $3975 million. Operating and maintenance expenses are projected between $2325 million and $2400 million, while general and administrative expenses are anticipated in the $170-$180 million range. Capital expenditures are expected to be around $150 million, while year-end liquidity is projected between $1.25 billion and $1.35 billion.
Full-year cash taxes paid are expected to range from $55 million to $60 million.
Important Earnings at a Glance
While we have discussed RIG’s second-quarter results in detail, let us take a look at three other key reports in this space.
Expand Energy Corporation EXE reported second-quarter 2026 adjusted earnings per share of $1.33, beating the Zacks Consensus Estimate of $1.22. The company’s bottom line increased from the year-ago adjusted profit of $1.10 per share, fueled by strong production and lower operating expenses.
Expand Energy’s ‘natural gas, oil and NGL’ revenues of $1.8 billion missed the Zacks Consensus Estimate of $2 billion. The top line was also below the year-ago figure of $2 billion.
As of June 30, 2026, the company had $663 million in cash and cash equivalents. Expand Energy had a long-term debt of $3.7 billion, reflecting a debt-to-capitalization of 16%.
NOV Inc. NOV reported second-quarter 2026 adjusted earnings of 31 cents per share, which beat the Zacks Consensus Estimate of 16 cents. The bottom line also increased 6.9% from the year-ago quarter’s 29 cents, driven by outperformance of the Energy Equipment segment.
The oil and gas equipment and services company’s total revenues of $2.1 billion beat the Zacks Consensus Estimate by $39 million. However, NOV’s revenues fell 2.5% from the year-ago quarter’s figure of $2.2 billion due to lower year-over-year revenues from the Energy Products and Services segment.
As of June 30, 2026, the company had cash and cash equivalents of $1.2 billion and long-term debt of $1.7 billion with a debt-to-capitalization of 21.3%.
The Williams Companies, Inc. WMB reported second-quarter 2026 adjusted earnings per share of 50 cents, which missed the Zacks Consensus Estimate of 52 cents. However, the bottom line increased from the year-ago period’s level of 46 cents, driven by better-than-expected performance of its Transmission, Power & Gulf, Northeast G&P and West segments.
The Tulsa, OK-based oil and gas storage and transportation company’s revenues of $3 billion missed the Zacks Consensus Estimate by $2 million. The figure increased by 9.8% from the year-ago quarter’s reported revenues. This can be attributed to higher service revenues and increased product sales.
As of June 30, 2026, the company had cash and cash equivalents of $203 million and long-term debt of $28.1 billion, with a debt-to-capitalization of 64.7%.
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Transocean Ltd. (RIG): Free Stock Analysis Report
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Expand Energy Corporation (EXE): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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