Noble’s Revenue Is Expected to Fall 68% in 2Q17




Previously in this series, we saw that most analysts rated Noble (NE) as a “hold.” Noble is expected to release its second quarter earnings on July 25, 2017. In this part, we’ll see how analysts view Noble’s 2Q17 revenue and EBITDA.


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Revenue estimates

The above chart shows Noble’s consensus revenue and EBITDA estimates. According to data compiled by Reuters, analysts expect Noble to deliver revenues of $283 million in 2Q17—a 68.3% fall year-over-year. The estimate is lower than the company’s 1Q17 revenues of $362.9 million.

The estimated decline in Noble’s revenue is mostly due to poor industry conditions and the company’s comparatively weak backlog. Noble isn’t the only company impacted by the industry downturn. It’s impacting other offshore drilling (IYE) companies such as Transocean (RIG), Ocean Rig (ORIG), Pacific Drilling (PACD), and Rowan Companies (RDC).

Going forward, analysts expect Noble’s 3Q17 revenue to reach $267 million. Based on its existing contracts, Noble’s revenue backlog for 2017 is ~$1.1 billion, which is substantially lower than its revenues of $2.3 billion in 2016. Analysts estimate that Noble’s 2017 revenues could reach $1.17 billion. Based on analysts’ estimates, we can comfortably say that analysts don’t expect any new contracts for the company.

EBITDA estimates

Wall Street analysts expect Noble’s 2Q17 EBITDA (earnings before interest, tax, depreciation, and amortization) to be $109 million—compared to $224 million in 2Q16 and $181 million in 1Q17. The company’s EBITDA estimate for 2017 is $496 million—compared to $898 million in 2016.


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