Oil driller Transocean Ltd. swung to a first-quarter profit as it slashed spending to offset a 35% revenue drop brought on by an oil rut amid a supply glut wreaking havoc through the sector.
Rig utilization fell to 51%, from 60% in the previous quarter and 79% in the year-ago period. Contract backlog, meanwhile, fell to $14.6 billion as of the company's most recent fleet status report in April, continuing a downward trend.
As of Feb. 11, Transocean had said Shell and Chevron accounted for about 51% and 21%, respectively, of the backlog. But both companies are cutting spending as they contend with the slump in oil prices.
Switzerland-based Transocean, which has the world's largest fleet of offshore drilling rigs, has sharply cut its fleet, taking some rigs out of service and scrapping others as it tries to recover from an ill-timed expansion just before oil prices collapsed.
Meanwhile, the oil-price slump has also affected the results of the master limited partnership it formed to boost its financial structure and mollify friction with billionaire investor Carl Icahn. Shares of Transocean Partners LLC, closed at $11.98 on Wednesday, down 21% over the past 12 months.
Over all, Transocean reported a profit of $249 million, or 68 cents a share, compared with a year-earlier loss of $483 million, or $1.33 a share. Excluding restructuring charges and other items, profit was 69 cents a share, down from $1.10 a share a year earlier.
Revenue dropped to $1.34 billion from $2.04 billion a year earlier.
Analysts surveyed by Thomson Reuters had projected adjusted profit of 29 cents a share on $1.14 billion in revenue.
Transocean cut expenses to $925 million, compared with $1.42 billion a year earlier.
Shares, down 45% over the past 12 months, rose 1.2% to $10.26 in after-hours trading Wednesday.
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