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Transocean Posts Unexpected Profit Thanks to More Cost Cuts

  • Largest offshore driller reported adjusted profit of 17 cents
  • Company slashed costs 25% from first quarter to $500 million

Transocean Ltd. surprised analysts by slashing its way to profitability in the second quarter as the world’s largest owner of offshore rigs tries to keep up with dwindling drilling demand from explorers.

The company based in Vernier, Switzerland, reported earnings of 17 cents a share, excluding certain items, according to a statement Wednesday. That was better than the average 2-cent loss estimated by 33 analysts surveyed by Bloomberg. Chief Executive Officer Jeremy Thigpen eliminated $1 out of every $4 in operating and maintenance costs during the quarter, as compared to the first three months of the year.

"The operating and maintenance expense was quite a bit below what we were expecting," Rob Desai, an analyst at Edward Jones in St. Louis who rates the shares a sell and owns none, said in a phone interview. "I think that’s really all that’s responsible for the beat."

Offshore rig contractors have been among the hardest hit in the...