Valaris Limited reported fourth‑quarter 2025 results that included $537.4 million in total operating revenue, $717 million in net income, and $97 million in adjusted EBITDA. Revenue was $502 million exclusive of reimbursable items, and the company recorded a $900 million increase in backlog, underscoring robust contract coverage for 2026 and 2027. The firm also announced new contract awards for its drillships DS‑7 and DS‑9 and maintained a 98 % revenue‑efficiency rate for the quarter and 96 % for the full year, its fifth consecutive year at or above that threshold.
Valaris beat consensus estimates on both revenue and earnings. Revenue of $537.4 million surpassed the Zacks consensus estimate of $499.16 million, a 9.44 % beat, driven by strong demand for high‑specification assets and the recent contract awards. Adjusted earnings per share of $0.79 exceeded the consensus estimate of $0.51 by 54.90 %, largely because the company kept operating costs in check while benefiting from a $680 million tax benefit that boosted net income.
The $680 million tax benefit is a one‑time item that inflated net income; operating profit was lower than in prior periods. Despite the tax benefit, the company’s operating margin remained healthy, and the high revenue‑efficiency rate indicates disciplined cost management and effective utilization of its fleet. The combination of strong contract coverage and efficient operations supports the company’s ability to generate cash flow in the near term.
Valaris provided forward guidance for fiscal year 2026, projecting operating revenues between $2,125 million and $2,205 million and adjusted EBITDA between $485 million and $565 million, excluding merger‑related costs. Approximately 97 % of the midpoint revenue forecast is covered by firm contracts, and the company expects idle drillships to return to work, signaling confidence in sustained demand for offshore drilling services.
The company reiterated its all‑stock transaction with Transocean, valued at roughly $5.8 billion, with an expected closing in the second half of 2026. The merger is positioned to create a leading offshore drilling entity with a combined fleet of 73 rigs and an enterprise value of about $17 billion, offering significant synergies and expanded market reach.
Investors reacted with caution, focusing on the year‑over‑year revenue decline, the impact of the tax benefit on net income, and the uncertainty surrounding the completion of the Transocean merger.
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