Noble Corporation plc (NE - Free Report) reported second-quarter 2018 loss of 49 cents per share – excluding non-cash change, wider than the Zacks Consensus Estimate of 46 cents and the year-ago quarter adjusted loss of 31 cents. Lower total rig utilization led to the underperformances.
Total revenues in the quarter declined to $258.4 million from $278.1 million in the year-ago quarter, due to lower sales from Contract Drilling Services. The top line, however, beat the Zacks Consensus Estimate marginally by 0.2%, thanks to higher overall average dayrates of the company’s fleet.
Net loss from continuing operations was $628.1 million, significantly wider than with $91.9 million in the second quarter of 2017. Total rig utilization declined to 54% from the year-earlier level of 65%. However, overall average dayrate rose to $180,689 from $164,475 in the year-ago quarter.
The average dayrate for Drillships of $282,412 was lower than $309,313 recorded in the prior-year quarter. However, average capacity utilization rose to 63% from 52% in the year-ago quarter.
The average dayrate for the company's jackups was $130,332, increased from $121,284 in the prior-year quarter. However, average capacity utilization declined to 70% from the year-ago level of 93%.
The average dayrate for the company's semisubmersibles was $126,278, marginally higher than $126,106 in the prior-year quarter. On the flip side, average capacity utilization fell to 8% from the year-ago quarter’s 17%.
As of Jun 30, 2018, 58% of the company's available rig operating days were committed for 2018, including 42% of floating rig days and 76% of jackup rig days.
Cost of contract drilling services fell 7% year over year to $151.4 million.
As of Jun 30, 2018, total backlog was approximately $2.6 billion.
Capital Expenditure & Balance Sheet
For the second quarter, the company’s capital expenditure came in at $47 million.
At the end of the reported quarter, the company had a cash balance of $411.5 million and long-term debt of $3.8 billion, with a debt-to-capitalization ratio of 44.6%.
Outlook & Guidance
The company expects more contracts to follow with the rising crude prices as several projects will turn out to be profitable. It can lead to more opportunities for Noble, an offshore drilling contractor.
For 2018, Noble reaffirmed its capital expenditure projection at about $150 million.
Zacks Rank & Key Picks
Currently, London-based Noble has a Zacks Rank #3 (Hold). Investors interested in the Energy sector can opt for some better-ranked stocks like Canadian Natural Resources Limited (CNQ - Free Report) , ConocoPhillips (COP - Free Report) and Cheniere Energy, Inc. (LNG - Free Report) . While Canadian Natural Resources sports a Zacks Rank #1 (Strong Buy), ConocoPhillips and Cheniere Energy both carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Calgary, Canada-based Canadian Natural Resources is an upstream energy company. The company’s top line for 2018 is anticipated to improve 35.3% year over year, while its bottom line is expected to increase more than 182%.
Houston, TX-based ConocoPhillips is an integrated energy company. The company’s top line for 2018 is likely to improve 14.1% year over year. In the last four reported quarters, the company delivered an average positive earnings surprise of 27.6%.
Houston, TX-based Cheniere Energy mainly focuses on liquefied natural gas-related businesses. The company’s top line for 2018 is anticipated to improve 25.9% year over year, while its bottom line is expected to increase more than 225%.
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