Questions Mounting For Noble Corporation Ordinary Shares (UK)(NYSE:NE)

Noble Corporation Ordinary Shares (UK)(NYSE:NE)

Noble Corporation Ordinary Shares (UK)(NYSE:NE) shares were down slightly, to $3.76, in after-hour trading as news that Royal Dutch Shell was terminating a jack-up contract almost a year early. However there was some good news. Royal Dutch Shell awarded Noble some short-term drillship work. Investors were also taking valuations into account after Citigroup downgraded NE shares from a “Buy” to a “Neutral” with the target price getting slashed from $11 to $4.70.

There is little doubt that the Citigroup downgrade will raise some eyebrows on the street as Noble Corporation Ordinary Shares (UK)(NYSE:NE) received no less than nine upgrades from analysts since the beginning of 2017. So far, the upgrades have not been warranted. YTD shares of Noble Corporation Ordinary Shares (UK)(NYSE:NE) are down over 36% and down over 57% for the past year. This has been good news for the short-sellers. Short-sellers hold shares short in an amount that represent 24.5% of the stock’s total float. At $3.76, NE shares are threatening to challenge their existing 52-week low of $3.65. Interested parties should keep a close eye on any news.

Noble Corporation Ordinary Shares (UK)(NYSE:NE) management style has guided it from a one rig operation in 1921 into one of the largest offshore drilling contractors. Noble’s growth is due to a series of strategic acquisitions of offshore drilling assets. These acquisitions follow Noble’s goals – to gain a strong position in foreign drilling markets, to expand marine drilling operations and to move into new markets and segments of the industry.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

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About the author: Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading. Steve keeps his head in the game by looking for, and writing about, small companies that often get overlooked by the big investment firms.

Improving Fundamentals Propel Noble Corporation Ordinary Shares (UK) (NYSE:NE) To Narrower Q1 Loss

Noble Corporation Ordinary Shares (UK) (NYSE:NE)

Noble Corporation Ordinary Shares (UK)(NYSE:NE) appear to be doing well in the offshore drilling sector even though the sector has been in turmoil for the better part of the past 12 months. The leading contract drilling company reported a net loss of $0.17 cents a share for the first quarter, compared to a net loss of $0.31 cents a share reported a year ago. Wall Street was expecting a net loss of $0.19 cents a share.

Noble Corporation Q1 Performance

A key factor to the company’s improving earnings is a gradual improvement in the sector’s backlog. Contracts appear to be slowly streaming in but enough to offset some of the losses that companies have registered over the past year.

Noble Corporation Ordinary Shares (UK)(NYSE:NE) confirming that it has been awarded $650 million in new contracts is fuelling optimism that the persistent downturn in the sector is finally coming to an end.

“First quarter fleet performance was exemplary, with total downtime approaching historic lows, while operating cost management efforts continued to produce positive results, helping to preserve our operating margins in the quarter, “said Chief Executive Officer David W. Williams

Noble Corporation Ordinary Shares (UK)(NYSE:NE) total revenue in the quarter came in at $363 million, nearly half $612 million reported last year comparable quarter. However, analysts were expecting the company to post revenues of $361.78 million in the quarter given the turmoil in the sector. Contract drilling services remains a key driver of the company’s earnings, revenues from the sector having come in at $354.7 million.

Improving Fundamentals

Unlike other companies in the sector, Noble Corporation is not sitting around and waiting for the market to turn around to its favor. The company has been aggressively in making deals that it believes have the potential to turn around its fortunes.

Noble Corporation Ordinary Shares (UK)(NYSE:NE) jack-up fleet is also running at a 93% utilization rate, something that should continue to drive its bottom line going forward. The fact that the company generated free cash flow of $103 million in the first quarter is further testament that its strategy is finally working.

If the first quarter performance is anything to go by then Noble Corporation is likely to see an improvement in fundamentals over the next 12 to 24 months. The company should also be on its way to reporting healthy free cash flow as it also works on reducing its debt.

Noble Corporation Ordinary Shares (UK)(NYSE:NE)’s stock was down by $0.15 in Monday trading session ending the day at lows of $4.67 a share.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

About the author: Monica Gray has an undergraduate degree in Accounting and an MBA – earned with Honors. She has six years of experience in the financial markets and has been a securities analyst for the past two years.