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Image courtesy of Transocean.

Switzerland-based Transocean reported $1.61 billion in third quarter revenue on Wednesday, beating analyst targets.

The company booked a net income attributable to controlling interest of $321 million, or $0.88 per diluted share, including $5 million of net favorable items, down slightly from a net income of $342 million in the second quarter.

Third quarter revenues fell to $1.61 billion from $1.88 billion in the previous quarter but still managed to beat analyst expectations.

The revenue dip was primarily due to “lower fleet utilization and a decline in other revenues related to contract termination fees recognized in the second quarter of 2015,” Transocean said.

Analysts had expected the company to post about $1.58 billion in revenues, Zacks said.

Adjusted net income fell to $316 million in the third quarter, $0.87 per diluted share, excluding net favorable items compared to $408 million excluding net unfavorable items in the second quarter.

Operating revenues dipped to $1.6 billion in the third quarter, down from $2.27 billion in the prior year quarter, while operating income climbed to $445 million, up substantially from the $2.16 billion operating loss booked in the year ago quarter.

Transocean took a $13 million third quarter loss on impairment and a $15 million net loss on the disposal of assets.

Operating and maintenance expenses fell $105 million sequentially to $880 million in the third quarter “due primarily to reduced activity,” the company said.

Cash flows from operating activities decreased $663 million sequentially to $648 million due primarily to the favorable Macondo-related insurance proceeds collected in the second quarter.

Fleet revenue efficiency was 95.0 percent, compared with 97.2 percent in the second quarter of 2015.

Fleet utilization fell to 70 percent from 75 percent in the prior quarter and the company’s contract backlog was $16.9 billion as of the October 26.

General and administrative expenses were $45 million, compared with $44 million in the prior quarter.

Capital expenditures climbed to $940 million, up from $195 million in the prior quarter.

The $745 million increase was largely associated with the company’s newbuild program and included the final shipyard payment for the Deepwater Thalassa.

As we move forward in this challenging market, we will continue to identify opportunities to drive unnecessary cost out of our business, while simultaneously investing in opportunities that will enable us to continue to exceed the performance expectations of our customers,” Transocean president and CEO Jeremy Thigpen said.