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Leading contract drilling company, Noble Corporation (NE - Analyst Report) is set to report its third-quarter 2013 results on Oct 16. Let’s see how things are shaping up prior to the announcement.

In the last quarter, the company’s earnings of 63 cents per share increased 6.8% year over year from 59 cents. The growth was aided by a decrease in downtime along with dayrates improvement. Also, the results were ahead of the Zacks Consensus Estimate of 56 cents.

Growth Factors this Past Quarter

In the second quarter, total revenue of Noble Energy rose 13.2% to almost $1,017.4 million from $898.9 million in the comparable quarter last year. The top line also beat the Zacks Consensus Estimate of $1,015.0 million. Contract Drilling Services contributed $975.5 million to the total revenue, reflecting a year-over-year increase of 15.0% mainly on improved fleet utilization and higher average dayrates.

The total operating income increased 3.9% to $253.9 million from the year-ago level of $244.5 million. Operating income from the Contract Drilling segment rose 3.0% year over year to $253.6 million from $246.2 million.

Noble has 78% of all rig days committed for this year, including 82% of floating rig days and 82% of jackup rig days. For 2014, 60% of the rig days are booked, comprising 80% of the floater time and 52% of the jackup rig days. Overall total backlog at the end of the second quarter was approximately $16.0 billion versus $14.0 billion as of Jun 30.

Earnings Whispers?

Our proven model conclusively shows that Noble Energy is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. This is the case here as you will see below.

Zacks ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is +1.41%. This is because the Most Accurate estimate is at 72 cents while the Zacks Consensus Estimate currently stands at 71 cents.

Zacks Rank: Noble Energy’s Zacks Rank #3 (Hold) increases the predictive power of ESP because the Rank when combined with an ESP of +1.41% indicates the possibility of positive results. We caution against stocks with Zacks Rank #4 and 5 (Sell rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Here are some companies you may also want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter.

Ocean Rig UDW Inc. (ORIG - Snapshot Report), earnings ESP of +100.00% and a Zacks Rank #1 (Strong Buy).

Swift Energy Co. (SFY - Snapshot Report), earnings ESP of +13.33% and a Zacks Rank #1 (Strong Buy).

Stone Energy Corp. (SGY - Analyst Report), earnings ESP of +8.11% and a Zacks Rank #1 (Strong Buy).
 

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