Noble Corp. Q2 Earnings & Revenues Beat Estimates, Up Y/Y

Zacks

Noble Corporation (NE), the leading contract drilling company, has reported second-quarter 2014 earnings of 91 cents per share. The results surpassed the Zacks Consensus Estimate of 67 cents and was higher than the year-ago quarter earnings of 63 cents.

Total revenue in the quarter rose 28.9% to almost $1,240.4 million from $1,017.4 million in the comparable quarter last year. The top line also beat the Zacks Consensus Estimate of $1,184.0 million. Contract Drilling Services contributed $1,200.4 million to the total revenue, reflecting a year-over-year increase of 23% mainly on higher average dayrates.

Second-Quarter Operating Highlights

Total operating income increased 37% to $346.6 million from the year-ago level of $253.9 million. Operating income from the Contract Drilling segment rose 37% year over year to $353.1 million from $257.6 million.

Total rig utilization declined to 79% from the year-earlier level of 83%. The overall average dayrate surged 23% to $231,003 from $187,537 in the year-ago quarter.

The average dayrate for semisubmersible rigs registered 7% year-over-year growth to $394,605. Average capacity utilization was 73% versus 76% in the year-ago period.

The average dayrate for Drillships rose 31% year over year to $407,259. Average capacity utilization was 92% against 78% in the year-ago period.

The average dayrate for the company's jackups was $130,851 compared with $116,266 in the year-ago quarter. Average capacity utilization fell to 80% from the year-ago level of 92%.

The company has 74% of all rig days committed for this year, including both floater and jackup units. For 2015, 50% of rig days are booked, comprising 59% of floater time and 46% of jackup rig days. Overall total backlog at the end of the second quarter was approximately $13.4 billion versus $14.3 billion as of Mar 31, 2014.

Financials

At the reported quarter-end, the company had a cash balance of $140.5 million and long-term debt of $6,013.9 million, with debt-to-capitalization ratio of 39% (compared with 38% in the preceding quarter). In the reported quarter, Noble Corp. invested $699 million in capital projects.

Zacks Rank

At present, Noble Corp. carries a Zacks Rank #3 (Hold rating).

Stocks to Consider

Better-ranked stocks in the oil and gas industry include Natural Gas Services Group, Inc. (NGS), Cameron International Corporation (CAM) and CNOOC Ltd (CEO). All of these have a Zacks Rank #1 (Strong Buy).

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