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Noble (NE) Q4 Loss Narrower Than Expected, Revenues Fall Y/Y

Zacks Equity Research

Noble Corporation NE reported fourth-quarter 2018 loss of 36 cents per share, narrower than the Zacks Consensus Estimate of a loss of 41 cents. However, the figure was wider than the year-ago quarter’s loss of 29 cents.
 

Noble Corporation Price, Consensus and EPS Surprise

 

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

 

Total revenues in the quarter declined to $309.9 million from $329.6 million in the prior-year quarter. However, quarterly revenues beat the Zacks Consensus Estimate of $287 million. Contract Drilling Services fell 9% year over year and contributed $292 million to total revenues.

Lower dayrates for drillships, jackups and semi-submersibles affected quarterly results. This was partially offset by increase in total rig utilization.

In 2018, the company reported a loss of $1.84 per share, narrower than the Zacks Consensus Estimate of a loss of $1.88. The leading contract drilling company reported a loss of $1.14 cents in 2017.

In 2018, total revenues declined to $1,082.8 million from $1,236.9 million in 2017. Nonetheless, the figure beat the Zacks Consensus Estimate of $1,060.0 million.

Q4 Operating Highlights

Net loss from continuing operations was $30.8 million, wider than a net loss of $13 million in the fourth quarter of 2017. Total rig utilization increased to 75% from the year-ago quarter’s level of 58%. The overall average dayrate declined to $176,443 from $213,664 in the year-ago quarter.

The average dayrate for drillships of $294,864 was substantially lower than $378,709 in the prior-year quarter. Average capacity utilization was 72% compared with 60% in the year-ago quarter.

The average dayrate for the company's jackups was $121,949 compared with $134,413 in the prior-year quarter. Average capacity utilization rose to 94% from the year-ago quarter’s level of 76%.

The average dayrate for the company's semi-submersibles was $112,434 compared with $261,661 in the prior-year quarter. Average capacity utilization jumped to 25% from the year-ago quarter’s level of 17%.

For 2019, about 62% of the available rig days were committed, including 49% of the floating rig days and 75% of the jackup rig days.

Backlog

As of Dec 31, 2018, total backlog was approximately $2.4 billion.

Financials

At the end of the fourth quarter, the company had a cash balance of $375.2 million and long-term debt of $3,877.4 million. Debt-to-capitalization ratio was 45.4% compared with 41.8% in the year-ago quarter.

Zacks Rank & Key Picks

Noble currently carries a Zacks Rank #3 (Hold). Investors interested in the energy sector can opt for some better-ranked stocks as given below.

CrossAmerica Partners L.P. CAPL is involved in the wholesale distribution of motor fuels, consisting of gasoline and diesel fuel. The company delivered average positive earnings surprise of 436.7% in the last four quarters. The company currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

San Antonio, TX-based NuStar Energy L.P. NS is a midstream energy company. For 2019, the bottom line, which has witnessed three upside revisions in the past 30 days, is expected to grow 64.2% year over year. The company currently holds a Zacks Rank #2 (Buy).

Madrid, Spain-based Repsol, S.A. REPYY is an integrated energy company. The bottom line for 2019 is expected to increase 13.7% year over year. The company delivered average positive earnings surprise of 9% in the trailing four quarters. The stock currently has a Zacks Rank #2.

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