Noble Earnings & Revs Get the Better of Ests
Leading contract drilling company, Noble Corporation (NE) reported first quarter 2014 earnings of 99 cents per share. The results surpassed the Zacks Consensus Estimate of 69 cents and improved from the year-ago earnings of 59 cents.
Total revenue in the quarter rose 28.9% to almost $1,251.2 million from $971.0 million in the comparable quarter last year. The top line also beat the Zacks Consensus Estimate of $1,207.0 million. Contract Drilling Services contributed $1,206.3 million to the total revenue, reflecting a year-over-year increase of 29.9% mainly on higher average dayrates. The decrease in operating downtime and higher bonus revenues aided the growth.
First Quarter Operating Highlights
Total operating income shot up 60.7% to $369.3 million from the year-ago level of $229.8 million. Operating income from the Contract Drilling segment rose 67.6% year over year to $383.9 million from $229.0 million.
Total rig utilization declined to 84% from the year-earlier level of 86%. The overall average dayrate surged 28.1% to $223,559 from $174,578 in the year-ago quarter.
The average dayrate for semisubmersible rigs registered about 22.3% year-over-year growth to $392,620. Average capacity utilization was 79% versus 84% in the year-ago period.
The average dayrate for Drillships rose about 25% year over year to $393,892. Average capacity utilization was 92% versus 83% in the year-ago period.
The average dayrate for the company's jackups was $124,962 compared with $105,559 in the year-ago quarter. Average capacity utilization fell to 86% from the year-ago level of 93%.
The company has 74% of all rig days committed for this year, including both floater and jackup units. For 2015, 47% of rig days are booked, comprising 62% of floater time and 39% of jackup rig days. Overall total backlog at the end of the first quarter was approximately $14.3 billion versus $15.4 billion as of year-end 2013.
Financials
At the end of the first quarter, the company had a cash balance of $114.7 million and long-term debt of $5,728.8 million, with debt-to-capitalization ratio of 38% (unchanged from year-end 2013). In the reported quarter, Noble invested $517 million in capital projects.
Ranks
Noble holds a Zacks Rank #3 (Hold rating). There are other stocks in the oil and gas industry, like Range Resources Corporation (RRC), Unit Corporation (UNT) and Helmerich & Payne, Inc. (HP), which appear promising with a Zacks Rank #1 (Strong Buy).
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