What's in the Offing for Noble (NE) This Earnings Season?
Noble Corporation plc NE is expected to report third-quarter 2017 earnings results on Nov 2, after the market closes.
Last quarter, the company delivered a positive earnings surprise of 6.06%. In the last four quarters, Noble delivered an average negative surprise of 7.58%.
Let’s see how things are shaping up for this announcement.
Noble Corporation Price and EPS Surprise
Noble Corporation Price and EPS Surprise | Noble Corporation Quote
Earnings Whispers
Our proven model does not conclusively show that Noble will beat estimates this quarter. That is because a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is pegged at -6.89%. This is because the Most Accurate estimate stands at a loss of 38 cents, while the Zacks Consensus Estimate is pegged at a loss of 35 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Noble currently carries a Zacks Rank #3.
Please note that the Sell-rated stocks (Zacks Rank #4 or 5) should never be considered going into an earnings announcement.
Factors Likely to Influence This Quarter
Noble is a leading offshore drilling firm with a robust portfolio of assets. Though the industry has witnessed a setback in the past few months, the company is likely to be less impacted by it than its peers. This is because Noble enjoys a strong backlog position with $3.2 billion.
Moreover, Noble has been able to significantly reduce expenses related to oil and gas production activities during second quarter of 2017. The success on this front reflects the company’s consistent efficiency gains and cost-reduction initiatives and should prove favorable in third-quarter earnings.
The company’s price chart is unimpressive. Shares of the company have underperformed the industry, quarter to date. Noble’s shares have declined 10.9%, while the market indices have decreased 6.7%.
However, the offshore drilling industry is witnessing rig oversupply. This is a cause for concern for the likes of Noble as an increase in rig count may hamper contract flow and dayrates. In addition, major oil companies are lowering deep-water capital spending, thereby worsening the situation.
Stocks to Consider
Here are some firms that you may want to consider on the basis of our model. These have the right combination of elements to beat earnings this quarter.
Denbury Resources Inc DNR, based in Plano, TX, is engaged in the exploration, production and development of natural gas properties in the Gulf Coast region. The company has an Earnings ESP of +11.11% and carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Tesoro Corporation ANDV, based in San Antonio, TX, operates as the refiner and marketer of petroleum products. The company has an Earnings ESP of +5.02% and carries a Zacks Rank #3.
Chesapeake Energy Corporation CHK, headquartered in Oklahoma City, OK, is an independent oil and gas company. The company has an Earnings ESP of +7.81% and carries a Zacks Rank #3.
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