Noble Q4 Profit Rises As Revenues Grow
Wednesday, Noble Corp. (NE), an oil and gas industry service provider, reported a rise in fourth-quarter profit from the year-ago period, primarily due to higher contract drilling services revenue and lower operating expenses.
The Sugar Land, Texas-based company reported a rise in fourth quarter net income to $418.57 million or $1.59 per share from $347.38 million or $1.29 per share in the corresponding quarter last year. On average, thirty-one analysts polled by First Call/Thomson Financial expected the company to earn $1.48 per share for the quarter. Analysts’ estimates typically exclude special items.
Operating revenues for the quarter increased to $910.15 million from $831.61 million in the corresponding period last year. Analysts estimated revenue of $918.92 million for the quarter.
Noble’s Chairman, President and CEO David Williams said, “Our fourth quarter results capped off a record year for the company. We held the line on costs, coming in well under our full-year guidance and delivered top-tier margins. We achieved solid improvements in safety, with Recordable Incidents down by 30 percent over 2007. Our revenue outlook remains strong, with over $11.5 billion of backlog at year-end. We are on track with our capital spending program to deliver our remaining newbuilds and we successfully executed on our opportunistic share repurchase plan.”
Segment wise, revenue from contract drilling services for the quarter increased 16% to $882.54 million from $761.08 million in the corresponding period last year. Reimbursables revenue was $19.34 million for the quarter compared to $30.01 million, while revenue from labor contract drilling services for the quarter declined to $7.73 million from $40.17 million in the comparable period of fiscal 2007. Engineering consulting revenue for the fourth quarter of fiscal 2008 increased modestly to $0.54 million from $0.36 million in the fourth quarter of 2007.
Operating costs and expenses for the quarter decreased to $396.05 million from $406.78 million in the prior-year similar period.
The company reported an ncome tax provision of $95.01 million compared to $78.75 million in the corresponding period of fiscal 2007.
The company stated that it invested $351.2 million in capital projects during the quarter, bringing the year-to-date total to $1.2 billion. Noble also noted that its debt as a percentage of total capitalization increased to 14.9% at December 31, 2008, from approximately 12.8% at the end of the third quarter due to the issuance of $250 million in unsecured notes in November 2008.
Noble indicated that it had repurchased 2.0 million of its ordinary shares during the fourth quarter 2008 at a total cost of $43.2 million and at an average price per share of $21.60. For the full year 2008, Noble said it repurchased approximately 8.0 million ordinary shares at an average price per share of $41.62 for a total cost of $331.5 million.
Among others in the industry, Houston, Texas-based Transocean Ltd. (RIG) reported third quarter earnings of $1.11 billion or $3.44 per share on revenue of $3.19 billion.
Houston, Texas-based Diamond Offshore Drilling Inc. (DO), reported third-quarter net income of $310.7 million or $2.23 per share on revenue of $900.4 million.
Another peer, Hamilton, Bermuda-based Nabors Industries Ltd. (NBR) reported third-quarter net income of $210.3 million or $0.73 per share on revenue of $1.44 billion.
For the fiscal year 2008, net income increased to $1.56 billion or $5.85 per share from $1.21 billion or $4.48 per share in the prior-year similar period.
Operating revenues for the full year 2008 increased to $3.45 billion from $3.0 billion in the similar period last year.
Looking forward, the company believes that the long-term fundamentals of the industry is sound even though the current condition of the global economic environment is clearly a cause of concern and a reason for caution.
Williams is of the view that the strength of the company’s balance sheet, the extent of contract coverage and the quality of customer base should position Noble well to both weather the current economic storm and capitalize on opportunities for growth in a disciplined manner.
Noble closed Wednesday’s regular trading at $23.30, up $2.49 or 11.97% on a volume of 9.0 million shares on the NYSE. In after-hours session, the stock gained $0.68 or 2.92%, trading at $23.98.