Noble (NE) Q3 Loss Wider Than Expected; Revenues Fall Y/Y

Leading contract drilling company Noble Corporation (NYSE:NE) reported third-quarter 2016 loss of 23 cents per share, wider than the Zacks Consensus Estimate of loss of 19 cents per share. The quarterly results also compared unfavorably with the year-ago quarter earnings of 72 cents per share.

Total revenue in the quarter declined to $385.1 million from $896.7 million in the comparable quarter last year. Contract Drilling Services plunged 57.3% year over year and contributed $373.2 million to the total revenue.

Third-Quarter Operating Highlights

Net loss from continuing operations was $44.2 million, which compared unfavorably with net income of $344.4 million in the third quarter of 2015. Total rig utilization decreased to 59% from the year-earlier level of 82%. The overall average dayrate declined to $238,869 from $385,755 in the year-ago quarter.

The average dayrate for drillships of $467,949 was substantially lower than $497,147 a year ago. Average capacity utilization was 70% compared with 100% in the prior-year period.

The average dayrate for the company's jackups was $109,387 as against $159,745 in the prior-year quarter. Average capacity utilization decreased to 80% from the year-ago level of 84%.

The average dayrate for the company's semi-submersibles was $293,269 compared with $698,512 in the prior-year quarter. Average capacity utilization plummeted to 13% from the year-ago level of 59%.

As of Sep 30, 2016, the company had 62% of available rig operating days committed for 2016, which included 41% of floating rig days and 85% of jackup rig days. For 2017, an estimated 47% of available rig operating days are committed. This consists of 28% and 69% of floating and jackup rig days, respectively.

Backlog

As of Sep 30, 2016, total backlog was approximately $4.7 billion. Of this, about $3.5 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 $426.1 million and long-term debt of $3,830.2 million, with debt-to-capitalization ratio of 33.1% compared with 32.9% in the preceding quarter.

Zacks Rank

Noble Corp currently has a Zacks Rank #3 (Hold).

Some better-ranked players from the same sector are Enbridge Inc. (NYSE:ENB) , Braskem SA (NYSE:BAK) and TransCanada Corporation (TO:TRP) . All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Enbridge Inc. reported a negative earnings surprise of 10.00% in the prior-year quarter.

TransCanada posted a positive earnings surprise of 22.92% in the last reported quarter.

Enviva Partners has a mixed earnings surprise history. The partnership posted positive earnings surprises in two of the last four quarters. It reported a positive earnings surprise of 20.51% in the preceding quarter.

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