Transocean posts profit as U.S. drilling increases

Transocean, the world’s largest offshore rig contractor, reported a fourth-quarter profit for the first time in three years as drilling in the U.S. Gulf of Mexico helped boost demand for vessels.

Net income was $456 million, or $1.19 a share, compared with a loss of $6.17 billion, or $18.67, a year earlier, the Vernier, Switzerland-based company said today in a statement. Excluding a $101 million tax benefit, per-share profit was 9 cents more than the average of 35 analysts’ estimates compiled by Bloomberg. Sales climbed 9 percent to $2.33 billion.

Fourth-quarter results a year earlier included a writedown because of the lower market value of its contract drilling business. The number of industry rigs operating in the U.S. Gulf rose 17 percent to an average of 48 during the fourth quarter from 41 a year earlier, according to Baker Hughes Inc.

“The magnitude of the writedown last year was pretty substantial,” John Keller, an analyst at Stephens Inc. in Houston, said in a phone interview before the earnings were released. He rates the shares at equal weight, the equivalent of a hold, and owns none. “Their operational performance over the course of 2012 has steadily improved.”

Billionaire investor Carl Icahn, who holds a 5.39 percent stake in Transocean, called on the company in January to issue a $4-a-share dividend. Transocean, which had about $6 billion in cash and near-cash items at the end of September, didn’t issue a dividend last year as it sought to maintain an investment grade credit rating and a “strong, flexible balance sheet” while reducing the value of its businesses.

Transocean last reported a profitable fourth quarter in 2009, according to data compiled by Bloomberg.
The earnings statement was released after the close of regular trading in New York. Transocean fell 0.3 percent to $52.15. The shares have 27 buy, 15 hold and two sell ratings from analysts.