The company announced Friday that it now expects its third-quarter earnings to include a non-cash charge of $1.97 billion tied to goodwill impairment. The charge comes from impairment testing conducted due to the decline in the market valuation of the contract drilling business. Goodwill totaled approximately $2.99 billion as of June 30.
Furthermore, Transocean expects an impairment of the Deepwater Rig asset group of $788 million thanks to decline in market outlook that reflects the recent decline in dayrates and utilization for the asset class.
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The company said it delayed its earnings release due to the complexities in determining these impairments.
Separately, TheStreet Ratings team rates TRANSOCEAN LTD as a "hold" with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate TRANSOCEAN LTD (RIG) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, compelling growth in net income and attractive valuation levels. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year."