Noble Corporation (NE: 32.06 0.00 0.00%) reported second-quarter 2010 earnings of 93 cents per share, well below the Zacks Consensus Estimate of $1.09 and the year-earlier quarter’s earnings of $1.54 per share. The quarter’s lower-than-expected results were mainly due to the impact of the Gulf of Mexico (GoM) moratorium on Noble’s floater fleet. We have adjusted the reported quarter earnings per share for 6 cents related to higher tax expenses and 2 cents related to Nigeria FCPA investigation.Second-Quarter Highlights
Total revenue in the quarter dropped approximately 21% to $709.9 million from $898.9 million in the comparable period last year. Contract Drilling Services revenue was $687.5 million, down 21% on a year-over-year basis.
Total operating income in the quarter was $268.5 million compared with $485.8 million in the year-earlier quarter. Operating income from the Contract Drilling segment was $411.9 million, down more than 33% year over year.
Total rig utilization in the second quarter was 80% compared with 84% in the year-ago quarter. Overall average dayrate was $156,683 versus $198,270 in second quarter 2009.
Average dayrate for the semisubmersible rigs (6,000 feet or greater) were $355,450, compared with $408,510 in the year-earlier quarter. Average capacity utilization was 92% versus 94% in the year-ago period. Semisubmersible rigs, which are capable to work less than 6,000 feet, experienced an average dayrate of $253.697 versus $251,945 in the year-ago quarter, while average capacity utilization was the same for the comparable period at 100%.
Average dayrate for the company’s jackups was $96,677 compared with $157,381 in the year-ago quarter. Average capacity utilization increased to 81% from the year-ago level of 80%.
At the end of the quarter, the company had cash balance of $1,083.1 million and long-term debt of $751.0 million, representing a debt-to-capitalization ratio of 9.4%.
In the reported quarter, Noble also signed an all-cash deal to acquire its closely held rival, FDR Holdings Limited (operating as Frontier Drilling), for a total consideration of $2.16 billion. The company expects to close the transaction by the end of the July 2010.
Noble’s total backlog as of June 30, 2010, was approximately $6.7 billion, down from $7.5 billion at the end of first quarter 2010 (excluding Frontier).
Outlook
As the Frontier deal and a long-term agreement with Royal Dutch Shell (RDS.A) for two of its newbuild ultra-deepwater drillships will provide an additional $6 billion contract backlog to Noble’s existing backlog, the earnings and cash flow visibility will be brighter in the near- to- medium term, in our view.
http://www.noblecorp.com/
| Analysts' Targets | |
| UBS Securities | $42 |
| Add | |
| Tuesday, June 29, 2010 | |
| Stifel Nicolaus | $36 |
| Accumulate | |
| Tuesday, June 08, 2010 | |
| Morgan Joseph & Co. Inc. | $62 |
| Outperform | |
| Wednesday, March 17, 2010 | |
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