The offshore drilling contractor reported that its quarterly profit jumped 36% to $174.1 million, or 68 cents a share, from $127.6 million, or 50 cents a share, in the same period one year earlier. The increase was due to Noble's raising of its daily rig prices, which increased to an average of $212,000 in the fourth quarter from an average of $194,600 in the third quarter.
Despite the profit increase, Nordea downgraded the stock to "sell" from "hold" and lowered the target price to $33 from $39.
TheStreet Ratings team rates NOBLE CORP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate NOBLE CORP (NE) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth, compelling growth in net income, expanding profit margins and good cash flow from operations. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 9.1%. Since the same quarter one year prior, revenues rose by 22.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
- NOBLE CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, NOBLE CORP increased its bottom line by earning $2.05 versus $1.45 in the prior year. This year, the market expects an improvement in earnings ($2.91 versus $2.05).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Energy Equipment & Services industry. The net income increased by 145.7% when compared to the same quarter one year prior, rising from $114.77 million to $281.96 million.
- The gross profit margin for NOBLE CORP is rather high; currently it is at 51.46%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 26.13% significantly outperformed against the industry average.
- Net operating cash flow has increased to $515.59 million or 30.34% when compared to the same quarter last year. Despite an increase in cash flow, NOBLE CORP's average is still marginally south of the industry average growth rate of 30.43%.
- You can view the full analysis from the report here: NE Ratings Report