Yahoo Finance Noble’s 1Q16 Earnings Miss but Revenues Top Estimates: Why?
Why Noble’s Stock Rose despite Lower-than-Expected Earnings
Noble Energy’s 1Q16 revenue
Noble Energy (NBL) reported its 1Q16 earnings on May 4. The company announced adjusted revenue of ~$902 million.
Wall Street analysts’ consensus estimate for revenue was ~$849.3 million. NBL’s 1Q16 revenue was ~19% higher than its 1Q15 revenue of ~$759 million.
Noble Energy’s 1Q16 earnings
NBL’s 1Q16 adjusted loss per share was $0.67—higher than analysts’ consensus estimate of $0.58 loss per share. NBL’s 1Q15 EPS were $0.03.
Upstream peers Cabot Oil and Gas (COG), EQT (EQT), and Antero Resources (AR) reported 1Q16 adjusted EPS of -$0.13, $0.07, and $0.17, respectively. These companies make up 8.6% of the iShares U.S. Oil & Gas Exploration & Production ETF (IEO).
Noble Energy is also a component of the Energy Select Sector SPDR Fund (XLE). XLE invests ~1.5% of its holdings in the company.
NBL’s 2015 revenue and earnings recap
For 2015, NBL reported adjusted revenue of ~$3.1 billion, ~36% lower than 2014 revenue of ~$4.9 billion. For 2015, NBL reported an adjusted profit of $0.52, which was $1.84 per share lower than the 2014 profit of $2.36 per share.
Key management comments
On the 1Q16 earnings conference, David Stover, NBL’s CEO, said, “Our strong underlying performance, the recent upward move in commodity prices, and announced proceeds from asset sales position us to generate significant excess cash in 2016, and give us more flexibility for the future. At current prices, we continue to be focused on balance sheet strength and the opportunity to pay down debt. As commodity prices move and sustain above $50 per barrel, we will begin to consider additional capital allocation to the U.S. unconventional business, with initial focus on our low cost and liquid rich assets in the DJ Basin in Texas.”
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