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Why Noble Energy's Stock Fell despite Its Earnings Beat

PART:
1 2 3 4 5
Part 3
Why Noble Energy's Stock Fell despite Its Earnings Beat PART 3 OF 5

Why Noble Energy Stock Fell after the 2Q17 Earnings Release

Noble’s stock performance

Following Noble Energy’s (NBL) 2Q17 earnings release on August 3, Noble Energy stock fell 8%. Since the beginning of this year, NBL’s stock has fallen 33.54%.

Why Noble Energy Stock Fell after the 2Q17 Earnings Release

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Noble Energy’s performance has mostly been driven by natural gas prices (UGAZ) and WTI (West Texas Intermediate) crude oil prices (UCO) prices. Energy prices have also been rising on the performance of the broader industry ETF, the Energy Select Sector SPDR ETF (XLE). Crude oil prices have fallen ~6% since the beginning of this year while natural gas prices fell ~16% in the same period. XLE, meanwhile, has fallen ~14.5 since the start of this year.

NBL’s stock, along with XLE and crude and natural gas prices, has underperformed the SPDR S&P 500 ETF (SPY)—the broader market. SPY has risen 10% since the start of 2017.

Noble Energy’s stock fell following its earnings despite posting better-than-expected results. This fall could be because of the company lowering its production guidance for the year. Read the previous two parts of this series to learn more about NBL’s 2Q17 performance.

NBL’s financial position

As of the end of 2Q17, Noble Energy had $4.5 billion in liquidity, which included an undrawn $4 billion credit facility.  The proceeds NBL received from its Marcellus divestments and its Noble Midstream Partners drop-down transactions went toward funding the cash component of its Clayton Williams Energy acquisition and the elimination of assumed debt resulting from the deal.

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