Benzinga | Feb 19, 2021 10:25AM EST

Earnings Preview: Transocean

On Monday, February 22, Transocean (NYSE:RIG) will release its latest earnings report. Check out Benzinga's preview to understand the implications.

Net Income, Earnings, And Earnings Per Share

Earnings and especially earnings per share (EPS) are useful measures of a company's profitability. Total earnings, which is also referred to as net income, equals total revenue minus total expenses. EPS equals to net income divided by the number of shares outstanding.

Earnings And Revenue

Analysts covering Transocean have modeled for quarterly EPS loss of $0.19 on revenue of $699.08 million. Transocean EPS in the same period a year ago totaled $0.43. Revenue was $792.00 million.

What Are Analyst Estimates And Earnings Surprises, And Why Do They Matter?

Wall Street analysts who study this company will publish analyst estimates of revenue and EPS. The averages of all analyst EPS and revenue estimates are called the "consensus estimates"; these consensus estimates can have a significant effect on a company's performance during an earnings release. When a company posts earnings or revenue above or below a consensus estimate, it has posted an "earnings surprise", which can really move a stock depending on the difference between actual and estimated values.

If the company were to report earnings in line when it publishes results Monday, quarterly profit would be up 55.81%. Sales would have fallen 11.73% from the same quarter last year. Here is how the company's reported EPS has stacked up against analyst estimates in the past:

Quarter Q3 2020 Q2 2020 Q1 2020 Q4 2020EPS Estimate -0.13 -0.27 -0.29 -0.30EPS Actual -0.11 0 -0.30 -0.43Revenue Estimate 768.28 M 773.88 M 802.99 M 816.40 MRevenue Actual 773.00 M 930.00 M 759.00 M 792.00 M

Stock Performance

Over the past 52-week period, shares of Transocean have declined 8.18%. Given that these returns are generally negative, long-term shareholders are probably a little upset going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. Transocean is scheduled to hold the call at 09:00:00 ET and can be accessed here.