Noble Earnings Preview

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While Noble (NYS: NE) missed estimates last quarter, investors hope that it will bounce back and outpace Wall Street expectations this quarter. The company will unveil its latest earnings Wednesday. Noble is a contract driller of oil and natural gas wells. It provides customers in the oil and gas industry with offshore drilling services and engineering and consulting services.

What analysts say:

  • Buy, sell, or hold?: Analysts strongly back Noble, with 23 of 27 rating it a buy and the remainder rating it a hold. Analysts like Noble better than competitor Diamond Offshore Drilling overall. Analysts still rate the stock a moderate buy, but they are a bit more wary about it compared with three months ago.
  • Revenue Forecasts: On average, analysts predict $758.5 million in revenue this quarter. That would represent a rise of 23.8% from the year-ago quarter.
  • Wall Street Earnings Expectations: The average analyst estimate is earnings of $0.56 per share. Estimates range from $0.44 to $0.75.

What our community says:
CAPS All-Stars are solidly behind the stock with 99.2% granting it an "outperform" rating. The community at large backs the All-Stars with 98.8% assigning it a rating of "outperform." Fools are keen on Noble and haven't been shy with their opinions lately, logging 666 posts in the past 30 days. Noble has a bullish CAPS rating of five out of five stars that is about on par with the Fool community assessment.

Management:
Noble's income has fallen year over year by an average of 79.5% over the past five quarters. Revenue has fallen for the past three quarters. The company's gross margin shrank by 17 percentage points in the last quarter. Revenue fell 11.5% while cost of sales rose 25% to $364.2 million from a year earlier.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters.

Quarter

Q2

Q1

Q4

Q3

Gross Margin

42.0%

42.7%

45.3%

45.2%

Operating Margin

12.6%

14.9%

18.1%

17.7%

Net Margin

8.6%

9.4%

15.3%

14.0%

One final thing: If you want to keep tabs on Noble movements, and for more analysis on the company, make sure you add it to your watchlist.

The Motley Fool owns shares of Noble.Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

At the time this article was published

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