| Will Noble Corp (NE) Disappoint Earnings Estimates in Q1? - Analyst Blog | |
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Noble Corporation plc NE is expected to report first-quarter 2015 earnings on Apr 29, after the market closes.
In the last quarter, the company’s earnings of 47 cents per share lagged the Zacks Consensus Estimate by a penny. The quarter's results also decreased 42.7% from the year-ago earnings of 82 cents per share. Let’s see how things are shaping up prior to the announcement.
Factors Likely to Affect Earnings
Noble Corp. is a leading offshore drilling firm with a robust portfolio of assets. Though the industry has witnessed a setback in the past few months, the company is likely to be less impacted by it than its peers considering its strong backlog position ($10.1 billion). The company’s backlog is expected to grow further on the recent agreements for newbuilds, which should give a boost to its earnings and cash flows. These factors are likely to drive earnings during the first quarter.
The average dayrate for drillships of $500,187 was also higher than $395,473 a year ago. Average capacity utilization was unchanged year over year at 100%. As of Dec 31, 2014, 81% of rig days are booked for 2015, which comprise 80% floater time and 82% jackup rig days. These secured commitments act as a cushion for the company in the volatile pricing market and are also likely to have a positive impact on the earnings.
Noble Corp. has made continuous endeavors to upgrade its fleet through acquisitions and newbuild projects. It continues to benefit from its robust position in the ultra-deepwater market. The company also inked a couple of contracts at higher dayrates for its semi-submersibles. The recently built drillships – Noble Sam Croft and Noble Tom Madden – have been contracted for three years under lucrative dayrates that should contribute handsomely to the company’s revenues in the first quarter as well as full-year 2015.
However, the offshore drilling industry is challenged with rig oversupply, which is a cause for concern for the likes of Noble Corp. This could hamper contract flow and dayrates. In addition to this, major oil companies are lowering deep-water capital spending, which is making the situation worse.
Noble Corp. remains highly leveraged to the North Sea, where tax regime changes could have a significant impact on future demand. Moreover, its high dependence on select customers may also pose a risk.
Earnings Whispers
Our proven model does not conclusively show that Noble Corp. is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case here, as you will see below.
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is currently pegged at -1.89%. The Most Accurate estimate for NobleCorp. stands at 52 cents while the Zacks Consensus Estimate is pegged higher at 53 cents.
Zacks Rank: Noble Corp. carries a Zacks Rank #3 (Hold). Though Zacks Rank #1, 2 or 3 increases the predictive power of ESP, the company’s ESP of -1.89% makes surprise prediction difficult.
We caution against Sell-rated stocks (Zacks Ranks #4 and 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Other Stocks to Consider
Here are some other companies from the energy sector that, according to our model, have the right combination of elements to post an earnings beat this quarter:
Marathon Petroleum Corporation MPC has an Earnings ESP of +2.13% and a Zacks Rank #1 (Strong Buy).
Spectra Energy Partners LP SEP has an Earnings ESP of +3.80% and a Zacks Rank #3 (Hold).
Hess Corporation HES has an Earnings ESP of +2.78% and a Zacks Rank #3. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report HESS CORP (HES): Free Stock Analysis Report NOBLE CORP PLC (NE): Free Stock Analysis Report SPECTRA EGY PTR (SEP): Free Stock Analysis Report MARATHON PETROL (MPC): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research
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Hess Corporation
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CODE : HES |
ISIN : US42809H1077 |
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ProfileMarket IndicatorsVALUE : Projects & res.Press releasesAnnual reportRISK : Asset profileContact Cpy |
Hess Corp. is a and oil exploration company based in United states of america. Hess Corp. is listed in Germany and in United States of America. Its market capitalisation is US$ 41.7 billions as of today (€ 37.4 billions). Its stock quote reached its lowest recent point on November 17, 1989 at US$ 10.06, and its highest recent level on September 20, 2024 at US$ 132.38. Hess Corp. has 315 053 615 shares outstanding. |