The Zacks Analyst Blog Highlights: Transocean, Eni SpA, Total, Royal Dutch Shell and Tenet Healthcare

  The Zacks Analyst Blog Highlights: Transocean, Eni SpA, Total, Royal Dutch
                          Shell and Tenet Healthcare

PR Newswire

CHICAGO, Oct. 23, 2012

CHICAGO, Oct. 23, 2012 /PRNewswire/ announces the list of stocks
featured in the Analyst Blog. Every day the Zacks Equity Research analysts
discuss the latest news and events impacting stocks and the financial markets.
Stocks recently featured in the blog include Transocean Ltd. (NYSE:RIG), Eni
SpA (NYSE:E), Total SA (NYSE:TOT), Royal Dutch Shell plc (NYSE:RDS.A) and
Tenet Healthcare Corp. (NYSE:THC).


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Here are highlights from Monday's Analyst Blog:

Transocean Updates Fleet Status

Recently, offshore drilling giant – Transocean Ltd. (NYSE:RIG) issued a
monthly 'Fleet Update Summary' covering the company's drilling rig status and
contract information.

Per the report, the company's high specification deewater floater Sedco
Express won a 20-month contract from Eni SpA (NYSE:E) to work in the offshore
region of Nigeria. The contract is executable from February 2013 at a revised
dayrate of $600,000 against a prior dayrate of $500,000.

Transocean's GSF Constellation II received 30-month contract to operate in the
waters of Gabon – from Total SA (NYSE:TOT). The dayrate for the job is fixed
at $160,000, higher than the earlier dayrate of $109,000.

Midwater floater – Transocean Amirante– got the 180-day option from Burullus
Gas Company to work in the Egyptian waters at a dayrate of $305,000. The
drillship's previous dayrate was $275,000.

However, drillship GSF Rig 103 has been sold for an undisclosed amount.

Since the last update on September 18, new contract and extensions totaled a
backlog of about $8.1 billion. This includes the $7.6 billion contract value
of the 10-year agreement signed between Transocean and Royal Dutch Shell plc
(NYSE:RDS.A), whereby the former will build four new drillships. 

Transocean is the leading offshore drilling contractor and the provider of
drilling management services worldwide. Its current contract drilling fleet
comprises 115 mobile offshore drilling facilities, which again include 48
high-specification deepwater floaters, 25 mid-water floaters and 9
high-specification jackups. The fleet also has 32 standard jackups and one
swamp barge that have been termed as discontinued operations.

Transocean currently has six ultra deepwater drillships and three
high-specification jackups under construction.

We are maintaining our long-term 'Neutral' recommendation on the stock. We
believe that Transocean is the industry leader in deep sea drilling with its
state-of-the-art mobile offshore drilling fleet that can function in most
challenging environments across the globe.

However, operational issues such as fluctuating dayrates and high costs along
with the company's high debt have kept us on the sidelines.

Tenet Downgraded to Neutral

We have downgraded our recommendation on Tenet Healthcare Corp. (NYSE:THC) to
Neutral from Outperform based on its rising expenses and bad debts coupled
with a highly leveraged balance sheet.

However, strong organic and inorganic growth and strategic plans to optimize
capital structure are the positives.

Tenet Healthcare is scheduled to announce its third quarter results on
November 7 before the bell. The Zacks Consensus Estimate for the quarter is
currently pegged at 36 cents, reflecting a 126.7% year over year improvement.

Tenet Healthcare has been generating consistent growth in operating revenues
since 2006. The first half of 2012 also witnessed operating revenue growth of
4.2% year over year to $4.57 billion. The improved results were attributable
to significant contribution from Tenet Healthcare's general hospitals, which
have generated revenues in excess of 96% of the net operating revenues for all

Tenet Healthcare has also been steadily expanding its operating capacity via
acquisitions and alliances. Moreover, the company is trying to enhance
business growth and optimize its capital structure through financial and
strategic plans comprising acquisitions, share repurchases, debt repayment and
a reverse stock split. While the acquisitions will be directed toward
strengthening the company's main business lines, the planned share buyback
will enhance earnings per share and boost shareholder value.

However, Tenet Healthcare is a highly leveraged company with approximately
$4.51 billion long-term debt as of June 30, 2012, compared with shareholders'
equity of only $1.18 billion. This implies a long-term debt-to-equity ratio of

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