Offshore drilling rig owner Transocean (NYSE:RIG) reported third-quarter earnings after the market closed on Wednesday and showed improvement across the board. Revenue rose 5% from a year ago to $2.56 billion and net income swung from a loss of $381 million to a profit of $546 million, or an adjusted $1.37 per share. That beat Wall Street's expectation of $2.49 billion in revenue and earnings of $1.07 per share.  

Increased efficiency helped drive earnings higher this quarter, highlighted by ultra-deepwater revenue efficiency increasing to 92.5% from 91.1% last quarter. The comparison to a year ago was a little unfair, because that's when Transocean took an $881 million charge related to exiting the standard jackup market. Long-term, the company's focus on deepwater should keep utilization and profit margins higher than they were in the past.

Transocean also announced it is spending $1.2 billion to build five new high-specification jackups that will be completed from 2016 to 2017. The high-specification market has replaced much of the demand formerly held by standard jackups, which have been at extremely low utilization rates until very recently.  

The ultra-deepwater market continues to command high dayrates, and as a result, Transocean is well positioned to grow into the future. Swinging to a profit wasn't entirely surprising after selling its jackup fleet, but the amount Transocean beat expectations was impressive and bodes well for the company going forward.