By RTT News, October 16, 2013, 09:26:00 PM EDT
(RTTNews.com) - Offshore drilling contractor Noble Corp. ( NE ) on Wednesday reported a profit for the third quarter that more than doubled from last year, reflecting strong revenue growth, one-time gains and lower operational downtime. Both revenue and adjusted earnings beat analysts' expectations.
David Williams, Chairman, President and Chief Executive Officer of Noble Corp. said, "With the continued success of our shipyard program, Noble benefited from the earlier-than-expected commencement of operations on two new ultra-deepwater drillships, which combined with a further reduction in total operational downtime, fewer shipyard days and essentially flat operating costs, were the primary catalysts behind the excellent third quarter performance."
The Switzerland-based company's contract drilling services revenues for the quarter rose 25 percent to $1.04 billion. The increase was primarily driven by the commencement of operations of the new ultra-deepwater drillships Noble Don Taylor and Noble Globetrotter II, a reduction in shipyard time and lower fleet downtime.
Total average rig utilization for the quarter rose to 85 percent from 78 percent in the prior-year period, while average dayrate increased 15 percent from the year-ago quarter to $194,645. Contract drilling margin for the quarter was 53.1 percent.
Third-quarter net income attributable to the company's shareholders was $278.57 million or $1.10 per share, up from $113.58 million or $0.45 per share in the same period last year.
The latest quarter's results include a gain on the sale of the jackup rig Noble Lewis Dugger, which closed in July, a settlement relating to the 2010 acquisition of Frontier Drilling, and an impairment charge taken on two submersible rigs. The net after tax gain for these items contributed about $63 million or $0.25 per share.
Excluding these, adjusted earnings for the quarter were $219 million or $0.85 per share, compared to $115 million or $0.45 per share in the year-ago period. On average, 35 analysts polled by Thomson Reuters expected the company to earn $0.70 per share for the quarter. Analysts' estimates typically exclude special items.
Revenues for the quarter grew 22 percent to $1.08 billion from $884.03 million in the year-ago period. Analysts had a consensus revenue estimate of $1.07 billion.
Total contract backlog as at the end of the third quarter was about $16.2 billion, compared to $16.0 billion at June 30, 2013. The increase was primarily due to contract awards on several of the company's jackup rigs operating in the North Sea, West Africa and in the Middle East.
Looking ahead, David Williams said, "We are also moving forward with the next phase of the project involving the spin-off of some of our standard assets with an expected completion in 2014. Further, eight of our final newbuild rigs are expected to be delivered from shipyards by the end of 2014, largely completing our heavy newbuild project backlog which will contribute to a growing level of free cash flow as these premium assets commence operations."
In late September, Noble said its board of directors approved a plan to separate the company's business into two separate and highly-focused offshore drilling companies.
Noble added that subject to business, market, regulatory and other considerations, the separation of the business may be preceded by an initial public offering of up to 20 percent of the shares of the new company, which will own Noble's older rigs.
NE closed Wednesday's regular trading session at $37.58, up $0.22 or 0.59 percent on a volume of 4.56 million shares. In after-hours, the stock further gained $0.87 or 2.32 percent to $38.45.
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