Transocean, the world’s largest offshore rig contractor, said first-quarter profit rose as demand increased for drilling vessels in shallow and deep waters.
Net income climbed to $321 million, or 88 cents a share, from $10 million, or 3 cents, a year earlier, Vernier, Switzerland-based Transocean said Wednesday.
The company, which has major offices in Houston, was expected to earn $1 a share, the average of nine analysts’ estimates compiled by Bloomberg. Expectations were for higher revenue and lower depreciation costs, James West, an analyst at Barclays’s investment- banking unit in New York, said before the earnings were released.
Billionaire investor Carl Icahn, who holds a 5.61 percent stake in Transocean, called on the company in January to issue a $4-a-share dividend and is seeking to replace three board members including Chairman Michael Talbert. Transocean, which had about $5.1 billion in cash and near-cash items at the end of 2012, has proposed a $2.24-per-share dividend after not issuing one 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.
“It sold their jackup fleet, and some of the depreciation went with the jackups,” said West, who rates the shares a buy and owns none. “On the revenue side, that’s just deepwater rigs and jackups rolling over to higher dayrates.”
The number of rigs operating in the U.S. Gulf of Mexico climbed 19 percent to an average of 50 during the first quarter from 42 a year earlier, according to Baker Hughes.
Transocean owned the $365 million Deepwater Horizon rig that was destroyed in the BP oil spill in the Gulf of Mexico. The company employed nine of the 11 workers who died in the April 2010 disaster.
The earnings statement was released after the close of