Abstract

Seadrill Limited is scheduled to report first-quarter 2026 results on May 11, 2026, Pre-Market, with the quarter’s setup pointing to revenue of 325.80 million US dollars, EPS of -0.24, and investors watching execution against contracted backlog and margin trajectory into mid-2026.

Market Forecast

For the current quarter, estimates indicate revenue of 325.80 million US dollars, down 2.61% year over year, EBIT of 6.18 million US dollars, down 86.77% year over year, and EPS of -0.24, implying a year-over-year decline of 147.77%. The company has not issued explicit gross margin or net margin guidance for the quarter; the direction implied by the EPS/EBIT mix suggests lower operating leverage and non-operating headwinds relative to the year-ago quarter, but a precise margin outlook is not available. The main business remains contract-driven revenue, with the contractual mix showing firm support from long-duration awards disclosed year to date; the revenue visibility embedded in recent awards supports a stable medium-term run-rate even as quarter-to-quarter results may reflect timing of mobilizations and maintenance. The most promising earnings lever over the next several quarters is the ultra-deepwater drillship portfolio anchored by awarded work in the US Gulf of Mexico and Brazil; last quarter’s contract revenue was 273.00 million US dollars and, while year-over-year growth by segment was not disclosed, newly announced awards increased aggregate backlog and enhanced scheduling visibility beyond 2026.

Last Quarter Review

In the prior quarter, Seadrill Limited reported revenue of 362.00 million US dollars, up 25.26% year over year, a gross profit margin of 33.24%, GAAP net income attributable to shareholders of -10.00 million US dollars for a net margin of -2.89%, and adjusted EPS of 0.18, down 83.18% year over year. Quarter on quarter, net profit improved by 9.09%, and revenue beat the quarter’s estimate by 7.94%, demonstrating resilient top-line execution despite the negative bottom line. By revenue category, last quarter included 273.00 million US dollars in contract revenue, 65.00 million US dollars in management contract revenue, 16.00 million US dollars in reimbursable revenue, and 8.00 million US dollars in leasing revenue; segment-level year-over-year growth was not disclosed.

Current Quarter Outlook

Main business: Contract revenue execution and margin path this quarter

The quantitative setup for the first quarter points to a moderate sequential reset after a strong fourth quarter revenue print, with current-quarter revenue estimated at 325.80 million US dollars versus 362.00 million US dollars in the prior quarter and down 2.61% year over year. The EBIT forecast of 6.18 million US dollars, alongside an EPS estimate of -0.24, implies that non-operating items, below-the-line expenses, or a less favorable revenue mix could weigh on the bottom line despite positive operating income. Together, these estimates suggest that while utilization and activity levels remain sufficient to support revenue in the mid-300 million US dollar range, near-term gross-to-net conversion may be constrained by the timing of mobilizations, any ramp costs, and quarter-specific maintenance. The last quarter’s gross margin of 33.24% provides a useful baseline for judging this quarter’s performance, but with no explicit margin guidance provided, investors will need to infer the direction from the revenue and EPS outcome. If reported results land close to the current EPS estimate while revenue tracks the 325.80 million US dollars forecast, it would imply pressure on net margin relative to the prior quarter’s -2.89% net profit margin, largely from non-operating items or temporary cost effects. Conversely, any outperformance on EPS versus the -0.24 estimate would likely come from either a lighter-than-anticipated non-operating burden or better-than-modeled operating leverage in the cost base. Management’s cadence on expenses such as reactivation or mobilization costs remains an important watch item for this quarter’s interpretation. Even absent explicit gross margin guidance, the revenue composition can signal underlying strength: the contract revenue line is the bellwether, and maintaining a similar mix to last quarter’s 273.00 million US dollars would provide a constructive backdrop for the second quarter and beyond. Execution on contracted programs without material downtime, combined with steady management contract revenue, would help frame the pathway back to positive GAAP net income later in the year if non-operating headwinds subside.

Most promising business: Ultra-deepwater awards and management contracts enhance backlog and revenue visibility

Recent award activity provides tangible support to the medium-term outlook, even if most of the incremental backlog does not immediately convert to first-quarter revenue. In April 2026, Seadrill announced approximately 260.00 million US dollars of awards in the US Gulf of Mexico, comprising a 365-day extension for the West Neptune starting in September 2026 and a 270-day program for the West Vela expected to begin in August 2026; while these start dates are in the second half of 2026, they extend scheduling certainty and support planning for utilization and maintenance. Earlier in April, Seadrill also disclosed a 1,095-day contract extension for the West Polaris in Brazil’s Búzios field, adding about 480.00 million US dollars to backlog and supporting visibility well into 2028, again providing durable coverage beyond the current quarter. The management-contract side also received a duration boost in March 2026 when the Sonadrill joint venture exercised options that extend the Sonangol Quenguela program by roughly 480 days, committing the unit into June 2028. While Seadrill recognizes management fees rather than full dayrate revenue for the joint venture, this supports steadier management contract revenue, which was 65.00 million US dollars in last quarter’s mix. Collectively, these developments illustrate why the most promising business lever remains the ultra-deepwater fleet and associated management services: although the financial effect is back-half and multi-year weighted, the incremental backlog can dampen volatility in quarterly planning and, over time, strengthen pricing and asset allocation. Looking across the revenue components reported last quarter—273.00 million US dollars of contract revenue, 65.00 million US dollars of management contract revenue, 16.00 million US dollars of reimbursable revenue, and 8.00 million US dollars of leasing revenue—the most visible growth runway ties to contract revenue anchored by these recent awards. Segment-level year-over-year growth rates were not disclosed, but the new awards and options exercised since January 2026 provide a clear upward adjustment to total backlog relative to quarter-end disclosures. This should enhance confidence in the durability of revenue across 2026–2027 and reduce the risk that transient quarterly weakness converts into a sustained downdraft in earnings power.

Key stock-price drivers this quarter: earnings cadence, backlog updates, and 2026 guidance checks

With the company set to report before the market open on May 11, 2026, the most important near-term stock driver is whether reported EPS tracks the -0.24 estimate or shows a discernible upside surprise. An in-line revenue outcome around 325.80 million US dollars would be consistent with steady activity levels, but the quality of earnings will be judged on how efficiently revenue translates to operating income and net income compared with the prior quarter’s 33.24% gross margin and -2.89% net margin. Any commentary pointing to normalization of quarter-specific costs, or a lighter non-operating burden, would be interpreted as a constructive datapoint for the second quarter’s margin path. Backlog updates are the second major driver for this print. The awards disclosed in March and April already added roughly 740.00 million US dollars to aggregate backlog across different geographies and contract types; incremental color on 2026 start dates, dayrate phasing, and any unannounced awards would help investors refine revenue scheduling for the second half. Clarity on the conversion of the award pipeline into firm backlog, along with timing for mobilization windows, would also shape expectations for quarterly revenue steps and potential lumpiness in the reimbursable and leasing lines. A third key driver is how the company frames its previously communicated 2026 revenue expectation of 1.40 billion to 1.45 billion US dollars, excluding 50.00 million US dollars of reimbursable revenue. Affirmation or refinement of this range would help investors triangulate the current-quarter estimate with the remainder of the year, especially in light of the newly announced awards with start dates in the second half. If management indicates that the second quarter will bridge toward a higher mid-year run-rate, it would support the notion that the first-quarter EPS profile is more a function of timing rather than deterioration in the earnings algorithm. Investors will also parse qualitative details around activity timing in the US Gulf of Mexico, where the company has acknowledged softer near-term conditions relative to the back half. Confirmation that the recent awards will fill calendar gaps without material idle time would increase confidence in third- and fourth-quarter revenue cadence. Finally, capital allocation signals—such as the balance between maintenance, potential reactivations, and shareholder returns—could influence how the market extrapolates free cash flow progression from the headline EBIT and EPS trajectory.

Analyst Opinions

Among 2026-dated views collected from January 1, 2026 through May 4, 2026, the balance of published stances is decisively in favor of the bullish camp, with bullish versus bearish opinions at 100% to 0% (neutral views excluded). On the bullish side, BTIG’s Gregory Lewis reiterated a Buy rating with a 55.00 US dollars price target in mid-April 2026, highlighting the durability of contracted work and the visibility provided by recent awards. BWS Financial’s Hamed Khorsand maintained a Buy rating in early April 2026 with an 80.00 US dollars price target, citing strengthened backlog and supportive company-specific developments including leadership transition alongside long-term contractual coverage. The bullish majority view rests on several observable elements that are germane to the current quarter and the next few quarters. First, recently disclosed awards in the US Gulf of Mexico and Brazil add about 740.00 million US dollars of backlog, materially de-risking mid-2026 and 2027 scheduling and reducing the probability that transient quarterly cost or utilization fluctuations derail the multi-quarter earnings setup. Second, the company’s previously stated 2026 revenue expectation of 1.40 billion to 1.45 billion US dollars (excluding reimbursables) frames the current-quarter revenue estimate of 325.80 million US dollars as consistent with a pathway to a higher second-half run-rate, given that newly awarded work ramps later in the year. Third, the earnings algorithm implied by consensus—positive EBIT alongside negative EPS—appears to be a function of below-the-line items and timing, which bulls interpret as less structural than an erosion in dayrate quality or utilization. Proponents of the bullish case also point to the revenue composition reported last quarter—273.00 million US dollars in contract revenue and 65.00 million US dollars in management contract revenue—as evidence that the top line is anchored by recurring elements of the operating model that tend to be more stable across individual quarters. They further note that last quarter’s 7.94% revenue beat over the estimate demonstrates that the company has been executing above modeled levels, even as GAAP net income was negative due to non-operating or timing-related factors. If the company delivers an in-line to better-than-expected EPS print this quarter, while reinforcing backlog and reiterating full-year revenue expectations, bulls believe the stock can begin to discount improving earnings conversion through the remainder of 2026. Looking beyond the print, bullish analysts emphasize that the announced schedule for West Neptune and West Vela in the US Gulf of Mexico should improve second-half visibility, and the multi-year West Polaris extension in Brazil helps underpin long-term planning. The extension of the Sonadrill joint venture program into June 2028 supports steadier management contract fees, which provides an additional buffer to quarterly fluctuations in the reimbursable and leasing categories. Collectively, these elements underlie the bullish majority’s view that the drivers of earnings power are intact and that the current quarter’s negative EPS estimate does not preclude a reacceleration in net income and cash conversion as newly awarded programs approach start dates and cost phasing normalizes. In sum, the prevailing institutional stance is that Seadrill Limited’s near-term earnings will be best evaluated against its contracted revenue base, the timing of newly awarded programs, and the consistency of its 2026 revenue framework. The bullish side expects the company to demonstrate progress on these fronts on May 11, 2026, and to frame a path toward margin and earnings normalization through mid- to late-2026, supported by a growing contracted backlog and steady execution on awarded work.