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Noble (NE) Q1 Loss Narrower Than Expected, Revenues Beat

Zacks Equity Research

Noble Corporation plc NE reported first-quarter 2019 loss from continuing operations of 37 cents per share, narrower than the Zacks Consensus Estimate of a loss of 42 cents. Also, the figure was narrower than the year-ago loss of 55 cents.

Total revenues in the quarter increased to $282.9 million from $235.2 million in the prior-year period. Also, quarterly revenues beat the Zacks Consensus Estimate of $275 million. Contract Drilling Services, which contributed $270.5 million to its total revenues, increased 18.1% year over year.

The better-than-expected results were supported by year-over-year increase in total rig fleet utilization and overall operating days.

Noble Corporation Price, Consensus and EPS Surprise

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

Operating Highlights

Net loss from continuing operations was $92 million, narrower than first-quarter 2018 loss of $135 million.

Total rig utilization increased to 76% from the year-ago level of 47%. However, overall average dayrate declined to $172,305 from $195,633 in the year-ago quarter. Nonetheless, overall operating days rose to 1,570 from 1,171 in the year-ago period. 

The average dayrate for the company's jackups was $127,150 compared with $153,662 in the prior-year quarter. Average capacity utilization rose to 93% from the year-ago level of 56%.

The average dayrate for the company's floaters was $236,715 compared with $259,326 in the prior-year quarter. Average capacity utilization jumped to 60% from the year-ago level of 37%.

Nearly 64% of the available rig days were committed for 2019, including 53% of floating rig days and 75% of jackup rig days.

Costs & Expenses

Total operating costs increased to $306.7 million in the quarter from the year-ago period’s $292 million. Cost of contract drilling services increased to $171.7 million in the first quarter from the year-ago level of $136.8 million. General and administrative costs declined to $16 million from $22.1 million in first-quarter 2018.

Backlog

As of Mar 31, 2019, total backlog was approximately $2.3 billion, of which around $1.4 billion and $900 million were contributed by floating rig and jackup rig fleets, respectively.

Financials

Capital expenditure in the reported quarter totaled $83 million.

At the end of the first quarter, the company had a cash balance of $187.1 million and long-term debt of $3,550.8 million, with a debt-to-capitalization ratio of 45.9%.

Zacks Rank and Stocks to Consider

Currently, Noble carries a Zacks Rank #3 (Hold). Prospective players in the energy space worth considering include Cactus, Inc. WHD, Hess Corporation HES and Chevron Corporation CVX, each holding a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.  

Cactus’ earnings growth is projected at 11.8% through 2019.

Hess’ earnings are expected to grow 90.5% through 2019.

Chevron’s earnings are likely to grow 13.5% on a year-over-year basis in the second quarter of 2019.

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