Worth Watching Stock: Noble Corporation (NYSE: NE)

On Friday, Shares of Noble Corporation (NYSE: NE) inclined 1.26% to $5.63. The stock opened its trade at $5.55 and after floating in a price range of $5.54 to $5.69, the stock grabbed the investor’s attention and traded 4,975,559 shares as compared to its average daily volume of 5.73M shares. The stock’s institutional ownership stands at 90.00%.

Noble Corporation plc (NYSE: NE, the Company) recently stated a net loss attributable to the Company for the three months ended March 31, 2018 (first quarter) of $142.0M, or $0.58 per diluted share, on revenues of $235.0M. Results in the quarter included an after-tax loss totaling $7.0M, or $0.03 per diluted share, resulting from the early retirement of debt. Excluding the loss from the early retirement of debt, the net loss attributable to the Company for the first quarter would have been $135.0M, or $0.55 per diluted share.

Contract drilling services revenues for the first quarter totaled $229.0M contrast to $321.0M in the fourth quarter of 2017. Revenues in the fourth quarter included payments totaling $38.0M regarding the recovery of certain contractual expenses and the settlement of a contract dispute. Excluding these payments, revenues in the fourth quarter would have been $283.0M. When contrast to the adjusted revenues, the 19 percent decline in the first quarter was due mostly to lower fleet utilization, with fewer operating days practiced in the Company’s jackup fleet, as well as lower average dayrates, a decline in mobilization revenues and fewer calendar days in the quarter.

Contract drilling services costs in the first quarter of $137.0M contrast to $153.0M in the fourth quarter of 2017. The 10 percent decline was due mainly to lower fleet operating days, partially offset by costs associated with preparations for forthcoming contracts on certain rigs, counting costs associated with the reactivation of the semisubmersible Noble Clyde Boudreaux.

At March 31, 2018, the Company’s contract backlog totaled $2.80B, with $1.80B attributable to the floating fleet and $1.00B to the jackup fleet. About 51 percent of the available rig operating days remaining in 2018 were committed to contracts, counting 38 percent of the floating fleet and 64 percent of the jackup fleet. The total backlog and estimate of committed days exclude the formerly noted new contracts.

Liquidity Position:

During the first quarter, the Company utilized $192.0M of cash on hand to repay senior notes maturing in 2018, as well as for the early redemption of senior notes maturing in 2019, counting debt extinguishment fees. These transactions followed the formerly declared January issuance of $750.0M aggregate principal amount of senior unsecured guaranteed notes and a concurrent $750.0M tender offer accomplished in February 2018. These debt transactions reduced the Company’s aggregate debt maturities before 2024 to about $201.0M from $954.0M, or a reduction of 79 percent. At March 31, 2018, the Company’s liquidity position totaled $2.30B, comprised of $462.0M of cash and $1.80B of available borrowing capacity under existing credit facilities, with no amounts drawn against the facilities.

Capital expenditures in the first quarter totaled $38.0M, of which an estimated $18.0M was dedicated mainly to sustaining capital, $11.0M to major projects, counting the reactivation and upgrade project for the Noble Clyde Boudreaux, and the remainder to certain other capital programs. The Noble Clyde Boudreaux project is expected to be accomplished in May below the budgeted cost of $30.0M. Following the project’s completion, the rig will mobilize to its drilling location offshore Myanmar. The Company continues to expect capital expenditures in 2018 to total about $150.0M.

NE has a market value of $1.45B while its EPS was booked as $-1.89 in the last 12 months. The stock has 258.15M shares outstanding. In the profitability analysis, the company has gross profit margin of 42.80% while net profit margin was -32.20%. Beta value of the company was 2.18; beta is used to measure riskiness of the security. Analyst recommendation for this stock stands at 3.20.