Hot Stock of the Day: Noble Corporation plc (NYSE: NE)

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LONDON, January 25, 2020 – Shares of Noble Corporation plc (NYSE: NE) showed the bearish trend with a lower momentum of -3.64% to $1.06. The company traded total volume of 2.336M shares as contrast to its average volume of 4.51M shares. The company has a market value of $264.13M and about 249.18M shares outstanding.

Noble Corporation plc (NYSE: NE) reported a net loss attributable to the Company for the three months ended September 30, 2019 (third quarter) of $445.0M, or $1.79 per diluted share, on total revenues of $276.0M. The results reflect the impact of a non-cash charge totaling $596.0M ($331.0M, or $1.33 per diluted share, net of noncontrolling interests) relating to the impairment of the drillship Noble Bully II. Excluding the non-cash charge, the Company would have reported a net loss attributable to the Company for the three months ended September 30, 2019 of $114.0M, or $0.46 per diluted share. Contract drilling services revenues for the third quarter totaled $259.0M compared to $275.0M in the second quarter. The six percent decline was due, in part, to lower revenues in the Company’s floating rig fleet, which reflected the absence of revenues received during the second quarter for the utilization of a managed pressure drilling (MPD) system on the Noble Globetrotter II. In addition, total fleet operating days declined in both the floating and jackup fleets, reflecting temporary out-of-service periods on the drillship Noble Don Taylor and the jackups Noble Houston Colbert and Noble Scott Marks. The lower fleet operating days resulted in a decline in third quarter utilization to 76 percent compared to 82 percent in the second quarter.

Contract drilling service costs in the third quarter totaled $176.0M compared to $169.0M in the second quarter. The four percent rise in costs was associated with the Noble Don Taylor and the Noble Houston Colbert as both units prepared for their next drilling assignments. Also, higher costs were experienced on the jackup Noble Joe Knight as the rig approached commencement of its initial contract offshore Saudi Arabia. These items were partially offset by a reduction in operations support costs.

Backlog, Capital and Balance Sheet:

At September 30, 2019, the Company’s revenue backlog totaled approximately $2.00B, of which an estimated $303.0M is related to the contract with the Bully II joint venture for the Noble Bully II.

Capital expenditures for the three months ended September 30, 2019 reached $57.0M, with expenditures of $204.0M through the nine months ended September 30, 2019, excluding the $54.0M seller-financed portion of the Noble Joe Knight purchase price. The September 2019 year-to-date total was comprised of $56.0M of sustaining capital, $139.0M of major projects, rig reactivations and subsea spares, and $9.0M of capitalized interest. The Company’s projection for total capital expenditures in 2019, excluding the purchase of the Noble Joe Knight, remains an estimated $250.0M. The Company currently expects capital expenditures in 2020 to be approximately $150.0M.

The Company reported cash and cash equivalents at September 30, 2019 of $136.0M and availability under its recently amended 2017 Credit Facility of $1.10B, or total liquidity of approximately $1.20B.

The Company offered net profit margin of -60.30% while its gross profit margin was 35.50%. ROE was recorded as -17.40% while beta factor was 2.55. The stock, as of recent close, has shown the weekly downbeat performance of -8.62% which was maintained at -13.11% in this year.