Shares of Transocean Inc., the world's largest offshore oil driller, had their biggest drop since 2001 on concern rising costs and delays getting rigs ready for new contracts will keep profit from growing.
Fourth-quarter net income was $151.6 million, or 45 cents a share, compared with a loss of $73.4 million, or 23 cents, a year earlier, Transocean said today in a statement. Profit will stay near that level through the first half of this year, even as high energy prices lift rig demand, the driller said.
A doubling of oil prices in two years generated record profits for producers such as Exxon Mobil Corp. and raised demand for drilling rigs. Transocean said costs to provide more rigs to its customers are rising as it refits idled units for new contracts. Shipyards also are charging more for maintenance and repairs, the company said.
``They're talking about a flat first half and expectations are much higher than that,'' said Poe Fratt, an analyst at A.G. Edwards & Sons Inc. in St. Louis who rates Transocean shares at ``buy'' and doesn't own any. ``They're having a lot of problems preparing for the upturn in rig rates.''
Fourth-quarter net income was $151.6 million, or 45 cents a share, compared with a loss of $73.4 million, or 23 cents, a year earlier, Transocean said today in a statement. Profit will stay near that level through the first half of this year, even as high energy prices lift rig demand, the driller said.
A doubling of oil prices in two years generated record profits for producers such as Exxon Mobil Corp. and raised demand for drilling rigs. Transocean said costs to provide more rigs to its customers are rising as it refits idled units for new contracts. Shipyards also are charging more for maintenance and repairs, the company said.
``They're talking about a flat first half and expectations are much higher than that,'' said Poe Fratt, an analyst at A.G. Edwards & Sons Inc. in St. Louis who rates Transocean shares at ``buy'' and doesn't own any. ``They're having a lot of problems preparing for the upturn in rig rates.''
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