Noble Corporation (NE), the leading contract drilling company, has reported third-quarter 2014 earnings of 57 cents per share. The results surpassed the Zacks Consensus Estimate of 54 cents but deteriorated from the year-ago quarter earnings of 85 cents.
Total revenue in the quarter rose to almost $828.8 million from $640.5 million in the comparable quarter last year. However, the top line came below the Zacks Consensus Estimate of $843.0 million. Contract Drilling Services contributed $810.2 million to the total revenue, reflecting a year-over-year increase of 30% mainly on higher average dayrates.
Third-Quarter Operating Highlights
Total operating income increased to $243.6 million from the year-ago level of $239.2 million. Total rig utilization increased to 85% from the year-earlier level of 84%. The overall average dayrate rose to $346,699 from $315,257 in the year-ago quarter.
The average dayrate for Drillships of $482,053 was also higher than $444,445 a year ago. Average capacity utilization was unchanged year over year at 100%.
The average dayrate for the company's jackups was $182,128 compared with $138,392 in the year-ago quarter. Average capacity utilization fell to 91% from the year-ago level of 98%.
The company has 79% of all rig days committed for this year, including both floater and jackup units. For 2015, 72% of rig days are booked, comprising 69% of floater time and 77% of jackup rig days. Overall total backlog at the end of the third quarter was approximately $10.6 billion versus $11.1 billion as of Jun 30, 2014.
Financials
At the end of the reported quarter, the company had a cash balance of $68.4 million and long-term debt of $4,737.1 million, with debt-to-capitalization ratio of 37% (compared with 39% in the preceding quarter). In the reported quarter, Noble Corp. invested $531.0 million in capital projects.
Zacks Rank
At present, Noble Corp. carries a Zacks Rank #3 (Hold).
Stocks to Consider
Better-ranked stocks in the oil and gas industry include Tallgrass Energy Partners LP (TEP), Delek Logistics Partners LP (DKL) and Enbridge Energy Management LLC (EEQ). All these stocks sport a Zacks Rank #1 (Strong Buy).
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