There have been some very early signs that the offshore oil and gas industry is picking back up again, but you can't find those signs in Noble Corporation's (NEBLQ) most recent earnings report. Revenue and earnings continued to decline, and there wasn't much news during the quarter about new contracts to suggest things are going to get better soon.

Let's take a look at Noble's most recent results and what management sees that might suggest the market will improve.

Semisubmersible rig in dockyard

Image source: Getty Images.

By the numbers

Metric Q2 2017 Q1 2017 Q2 2017
Revenue $278.1 million $362.9 million $894.8 million
Operating income ($43.9 million) $45.8 million $449.7 million
Net income ($93.3 million) ($301.7 million) $322.9 million
EPS ($0.38) ($1.24) $1.28

Source: Noble Corporation earnings release.

It's not easy to find the good things in this most recent earnings report from Noble. The company continues to keep a close eye on costs, but rigs continue to roll off contract faster than it can sign customers up for new contracts. There was also a $0.07 per share charge related to the Paragon Offshore bankruptcy baked into that most recent result. The net income loss from the first quarter relates mostly to a $260 million non-cash tax expense, so it's not as though there was a sharp increase in the past few months.

Noble's jackup fleet continues to be the pride of the fleet. Jackups ended the quarter with a utilization rate of 93% and a respectable average dayrate of $121,300. It did have one floating rig roll off contract, though, which was a big dent to profitability. The worst performing segment of the business continues to be its older fleet of semisubmersibles -- utilization rate of 17% and an average dayrate of $126,100. Considering the age of these vessels, it would not be a stretch of the imagination to see these rigs get retired and ultimately scrapped in the next several months.

Thankfully, Noble continues to generate free cash flow even though earnings are negative because of high non-cash depreciation and amortization expenses. At the end of the quarter, the company still had $600 million in cash on hand and a net debt of $3.2 billion.

What management had to say

Noble CEO David Williams mentioned in his statement that this quarter was a testament to the company's ability to weather the storm in the rig market, which isn't exactly a glowing review of the most recent quarter. He did say, though, that things are starting to look better thanks to new discoveries and better economics for offshore projects.

Despite the recent crude oil price volatility, our customers continue to evaluate offshore rig needs covering the remainder of 2017 and 2018. The number of jackup rigs under contract has risen steadily since the fourth quarter of 2016, while several contract awards in recent weeks provide evidence of intermediate-term support for the industry's floating rig capacity. Some of the recent floating contract awards and others still pending are addressing new, emerging offshore opportunities, such as the Black Sea, Guyana, Suriname, Mexico and Egypt, driven in many cases by the confirmation of excellent hydrocarbon potential. We still expect a meaningful decline in the industry's total supply of jackup and floating rigs given the age, condition, and state of preservation of much of the global fleet. While our industry requires more time to recover, we continue to show steady progress.

What a Fool believes

Noble's results weren't great. There isn't a whole lot of new contracts out there for rigs, but some of Noble's peers have found work lately. The fact that the company hasn't been able to pick up much work might suggest that the company has some work to do on the marketing side of the business. Management is hoping that its collaboration with General Electric on what it's calling the Digital Rig could reap rewards down the road, but certainly not today.

If the company isn't able to find work for some of its rigs in the coming quarters, especially those that are slated to roll off contract by the end of 2017, then Noble could be in a little trouble.