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Seadrill posts Q3 net loss on legal provision impact

By Reuters News


Overview

  • Deepwater drilling firm's Q3 operating revenue beat analyst expectations

  • Adjusted EBITDA for Q3 also beat analyst expectations

  • Company posted net loss due to legal provision and repurchased $22 mln of shares


Outlook

  • Seadrill raises 2026 total operating revenue guidance to $1.56-$1.58 bln, excluding $90 mln reimbursables

  • Company lifts 2026 adjusted EBITDA guidance to $440-$460 mln

  • Seadrill narrows 2026 capital expenditure and long-term maintenance guidance to $210-$230 mln


Result Drivers

  • FEWER OPERATING DAYS - Co said lower Q3 revenue was mainly due to fewer operating days for West Carina, which completed its contract in Q2, and downtime between contracts for West Vela, West Elara, and Sevan Louisiana

  • INCREASED OPERATING DAYS - Revenue decline was partially offset by more operating days for West Tellus, which began a long-term contract in June

  • LEGAL PROVISION - Net loss in Q3 included the impact of a legal provision booked during the quarter


Company press release:


Key Details

Metric

Beat/Miss

Actual

Consensus Estimate

Q3 Operating Revenue

Beat

$428 mln

$378.21 mln (6 Analysts)

Q3 Loss Per Share

$0.49

Q3 Net Loss

$30 mln

Q3 Adjusted EBITDA

Beat

$121 mln

$100.21 mln (6 Analysts)

Q3 Adjusted EBITDA Margin

29.70%

Q3 Operating Profit

$44 mln


Analyst Coverage

  • The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 9 "strong buy" or "buy", 1 "hold" and no "sell" or "strong sell"

  • The average consensus recommendation for the oil & gas drilling peer group is "buy"

  • Wall Street's median 12-month price target for Seadrill Limited is $55.50, about 16.3% above its November 2 closing price of $47.73

  • The stock recently traded at 17 times the next 12-month earnings vs. a P/E of 20 three months ago


Reuters Recommended Reads

  • Nov 2 - Valaris Ltd Q3 revenue rises 10% on drillship contracts

  • Nov 2 - Borr Drilling retrieves fourth body after Gabon rig sinking, one person missing

  • Nov 3 - Expro beats Q3 revenue expectations


For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.


(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)

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