Transocean LTD (NYSE:RIG) stock fell 0.71% (As on February 18, 11:16:16 AM UTC-4, Source: Google Finance) after the company posted lower than expected results for the fourth quarter of FY 24. Contract drilling revenues for the three months ended December 31, 2024, increased sequentially by $4 million to $952 million, primarily due to increased utilization for one rig that returned to work after undergoing a special periodic survey in the third quarter and higher reimbursement revenues, partially offset by lower revenue efficiency across the fleet. Operating and maintenance expense was $579 million, compared with $563 million in the prior quarter. The sequential increase was the result of higher in-service maintenance costs across our fleet, partially offset by a settlement with insurance carriers. General and administrative expense was $56 million, up from $47 million in the third quarter due primarily to increased legal and professional fees. Cash provided by operating activities was $206 million during the fourth quarter of 2024, representing an increase of $12 million compared to the prior quarter. The sequential increase was primarily due to timing of interest payments and decreased payments for accounts payable, partially offset by reduced collections from customers. Fourth quarter 2024 capital expenditures of $29 million, compared to $58 million in the prior quarter, were related to capital upgrades for certain rigs in the fleet.

RIG in the fourth quarter of FY 24 has reported the adjusted loss per share of 9 cents, missing the analysts’ estimates for the adjusted earnings per share of 1 cent. The company had reported the adjusted revenue of $952 million in the fourth quarter of FY 24, missing the analysts’ estimates for revenue of $958.5 million. The company noted a significant backlog of $8.3 billion as of early 2025, reflecting strong demand and a focus on technological advancement in offshore drilling. Despite a full-year loss of $512 million for 2024, improvements in operational execution and cost control were emphasized as priorities moving forward. The company showed a positive net income attributable to controlling interest of $7 million for the fourth quarter of 2024, a substantial recovery from a loss of $494 million in the prior quarter. Meanwhile, the significant increase in the Effective Tax Rate from 6.0% to 89.0% raises concerns about tax implications and potential financial management issues.

Additionally, in 2024, the company continued to advance the position as the technological leader in offshore drilling by, among other things, executing the first two 20K subsea completions in the history of the industry.