Noble (NE) Earnings Meet, Revenues Miss Estimates in Q3

Noble Corporation NE reported third-quarter 2017 loss of 36 cents per share, in line with the Zacks Consensus Estimate. The figure was wider than the year-ago quarter’s loss of 23 cents. Lower dayrates for drillships and semi-submersibles negatively impacted the results.

Total revenues in the quarter declined to $266 million from $385.1 million in the comparable quarter last year. Revenues also lagged the Zacks Consensus Estimate of $267 million. Contract Drilling Services plunged 30.4% year over year and contributed $259.7 million to total revenues.
 

Noble Corporation Price, Consensus and EPS Surprise

 

Noble Corporation Price, Consensus and EPS Surprise | Noble Corporation Quote

Third-Quarter Operating Highlights

Net loss from continuing operations was $87.4 million, wider than the net loss of $55.1 million in the prior-year quarter. Total rig utilization increased to 60% from the year-earlier level of 59%. The overall average dayrate declined to $168,127 from $238,869 in the year-ago quarter.

The average dayrate for drillships was $286,819, lower than $467,949 a year ago. Average capacity utilization was 56% compared with 70% in the prior-year period.

The average dayrate for the company's jackups was $127,163 as against $109,387 in the prior-year quarter. Average capacity utilization increased to 81% from the year-ago level of 80%.

The average dayrate for the company's semi-submersibles was $104,028 compared with $293,269 in the prior-year quarter. Average capacity utilization increased to 17% from the year-ago level of 13%.

As of Sep 30, 2017, the company had 54% of available rig operating days committed for 2017, which included 36% of floating rig days and 73% of jackup rig days. For 2018, an estimated 40% of available rig operating days are committed. This consists of 34% and 46% of floating and jackup rig days, respectively.

Backlog

As of Sep 30, total backlog was approximately $3.2 billion. Of this, about $2 billion relates to floating rig fleet and $1.2 billion pertains to jackup fleet.

Financials

At the end of the reported quarter, the company had a cash balance of $608.8 million and long-term debt of $3,795.3 million, with debt-to-capitalization ratio of 38.9% compared with 33.1% in the year ago quarter.

Q3 Price Performance

The pricing chart reveals that the company’s shares have outperformed the industry in the last three months. During this period, the company’s shares have returned 27.1% compared with the industry’s rally of 8%.

Zacks Rank & Key Picks

Noble Corp currently has a Zacks Rank #3 (Hold). A few better-ranked players in the energy sector are Braskem SA BAK, ConocoPhillips COP and SunCoke Energy Inc SXC. All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The largest petrochemical operator in Latin America, Braskem, delivered a positive earnings surprise of 68.54% in the preceding quarter.

ConocoPhillips, based in Houston, TX, is a major global exploration and production company. It delivered an average positive earnings surprise of 152.34% in the last four quarters.

SunCoke Energy produces metallurgical coke in the United States. The company delivered average positive earnings surprise of 113.52% in the last four quarters.

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