Transocean Q2 Earnings Beat Estimates, Revenues Decline Y/Y

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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