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How The Wheels Came Off Noble Energy's Bus

By Seth Jayson – Updated Apr 7, 2017 at 11:10AM

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Just the facts, Fool.

Noble Energy (NYSE: NBL) reported earnings on Oct. 25. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Sep. 30 (Q3), Noble Energy missed estimates on revenues and whiffed on earnings per share.

Compared to the prior-year quarter, revenue expanded and GAAP earnings per share dropped significantly.

Gross margins grew, operating margins shrank, net margins shrank.

Revenue details
Noble Energy booked revenue of $1.01 billion. The 14 analysts polled by S&P Capital IQ anticipated revenue of $1.05 billion on the same basis. GAAP reported sales were 15% higher than the prior-year quarter's $874.0 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.93. The 25 earnings estimates compiled by S&P Capital IQ averaged $1.06 per share. GAAP EPS of $1.23 for Q3 were 48% lower than the prior-year quarter's $2.38 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 84.3%, 180 basis points better than the prior-year quarter. Operating margin was 29.1%, 4,760 basis points worse than the prior-year quarter. Net margin was 22.0%, 2,850 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $1.11 billion. On the bottom line, the average EPS estimate is $1.28.

Next year's average estimate for revenue is $4.31 billion. The average EPS estimate is $4.86.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 390 members out of 406 rating the stock outperform, and 16 members rating it underperform. Among 105 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 99 give Noble Energy a green thumbs-up, and six give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Noble Energy is outperform, with an average price target of $114.07.

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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no positions in the stocks mentioned above. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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