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Noble (NE) Gears Up for Q1 Earnings: Is a Beat in the Cards?

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Noble Corporation ((NE - Free Report) ) is scheduled to release first-quarter 2018 results on May 2, after the closing bell. In the last reported quarter, the company pulled off a positive earnings surprise of 9.4%. We expect the company to report a beat this earnings season as well.

Why a Positive Surprise?

Our proven model shows that Noble is likely to beat estimates this quarter as the stock has the right combination of the two key ingredients for this to happen — a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold).

Zacks ESP: Noble has an Earnings ESP of +5.74% as the Most Accurate estimate of a loss of 55 cents is lower than the Zacks Consensus Estimate of a loss of 58 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The stock carries a Zacks Rank #3, which increases the predictive power of ESP. The combination of Noble’s favorable Zacks Rank and positive ESP makes us reasonably confident of earnings beat this season.

Conversely, we caution against Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Noble Corporation Price and EPS Surprise


Noble Corporation Price and EPS Surprise | Noble Corporation Quote

Factors to Consider

Noble is the owner and operator of highly advanced fleet of rigs that are specialized in drilling offshore oil and gas resources. The healthy first-quarter 2018 crude pricing scenario was favorable for the company’s drilling business. 

Per the U.S. Energy Information Administration, the average monthly price of West Texas Intermediate (WTI) crude for the month of January, February and March was recorded at $63.70 per barrel, $62.23 per barrel and $62.73 per barrel, respectively. Notably, the commodity never crossed the $60 psychological mark in the 2015-2017 period. The production cut extension agreement by the OPEC players through 2018-end primarily supported the rally in crude.

Moreover, the company’s balance sheet is highly liquid. Considering the cash equivalent balance of $663 million — as of Dec 31, 2017 — and the size of borrowing under credit facilities, the total liquidity balance of Noble was reported at $2.5 billion.

Other Stocks to Consider

Here are some other firms that you may want to consider on the basis of our model. These have the right combination of elements to beat earnings this quarter.

Solaris Oilfield Infrastructure, Inc. (SOI - Free Report) has an Earnings ESP of +6.28% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

EOG Resources, Inc. (EOG - Free Report) has an Earnings ESP of +3.33% and a Zacks Rank #1.

Continental Resources, Inc. (CLR - Free Report) has an Earnings ESP of +3.10% and a Zacks Rank #3.

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