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Noble (NBL) Up 10.2% Since Last Earnings Report: Can It Continue?

Zacks Equity Research

A month has gone by since the last earnings report for Noble Energy (NBL). Shares have added about 10.2% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Noble due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Noble Energy Posts Narrower-Than-Expected Loss in Q2

Noble Energy, Inc.  incurred an adjusted loss of 10 cents per share in second-quarter 2019, narrower than the Zacks Consensus Estimate of a loss of 13 cents.

Total Revenues

Noble Energy's total revenues declined 11.1% year over year to $1,093 million in the second quarter. Nevertheless, the top line outpaced the Zacks Consensus Estimate of $1,049 million by 4.2%.

Operational Results

In the quarter under review, sales volume averaged 349 thousand barrels of oil equivalent per day (MBoe/d). U.S. onshore volumes averaged 263 MBoe/d. U.S. onshore assets contributed 75.3% to total sales volume in the second quarter.

The company generated operating income of $32 million compared with $343 million in the year-ago quarter.

Realized Prices

U.S. onshore realized crude oil and condensate prices in the reported quarter dropped 10% to $58.13 per barrel from the year-ago quarter’s level of $64.62.

U.S. onshore natural gas prices were $1.61 per thousand cubic feet, down 29.7% year over year.

U.S. onshore realized prices for natural gas liquids declined 40.4% to $14.54 per barrel.

Financial Highlights

Noble Energy's cash and cash equivalents as of Jun 30, 2019, were $470 million compared with $716 million on Dec 31, 2018.

Long-term debt was $6,866 million as of Jun 30 compared with $6,574 million on Dec 31, 2018.

Cash flow from operating activities in the quarter under review was $564 million, up from $496 million in the prior-year quarter.

Guidance

Considering its impressive run in the first half of the year, the company raised its 2019 sales volume guidance in the range of 353-363MBoe/d from 345-365 MBoe/d.

For the third quarter of 2019, Noble Energy expects U.S. onshore oil volumes in the range of 282-294 MBoe/d. The company anticipates total third-quarter volumes in the range of 370-385 MBoe/d.

Furthermore, the company intends to make organic capital expenditures worth $600-$675 million in the third quarter.
 

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates revision. The consensus estimate has shifted 13.35% due to these changes.

VGM Scores

Currently, Noble has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Noble has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.



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