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Ahead of the Bell: Noble Corp. profit drops

Thursday, 18 Oct 2012 | 8:22 AM ET

NEW YORK -- Noble posted its first decline in quarterly profit since last year's second quarter and spooked some industry watchers with higher-than-expected costs.

Third-quarter net income for the offshore drilling contractor fell to $114.8 million, or 45 cents per share, from $135.3 million, or 53 cents per share, in the year-ago quarter. The result missed Wall Street forecasts by 4 cents per share. Revenue of $884 million was also shy of forecasts.

Jud Bailey, an analyst with International Strategy and Investment Group LLC, said operating costs of $449 million were above his estimates. He expects some pressure on the stock Thursday.

Analyst Brad Handler at Jefferies & Co. believes Wall Street is underestimating Noble's operating expenses for next year and that profit forecasts are too high. Analysts are expecting earnings of $4.43 per share for 2013, which would represent growth of 87 percent from estimated profit of $2.37 per share for this year.

At $37.69, shares of Noble Corp. have risen more than 20 percent so far in 2012. They've risen nearly 9 percent in the past two weeks.

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