Noble Corp., the offshore drilling contractor building 11 new rigs, fell the most in seven months after forecasting costs higher than analysts expected.
Noble fell 6 percent to $37.46 at the close in New York, the biggest drop since June 21.
Contract drilling costs for the Geneva-based company this year are projected to be in the range of $2.05 billion to $2.15 billion, an increase of as much as 19 percent compared to the $1.8 billion in expenses last year, Chief Financial Officer James Maclennan told analysts and investors today on a conference call.
“The cost guidance for 2013 is obviously disappointing,” John Keller, an analyst at Stephens Inc. in Houston, said in a phone interview today. He rates the shares at overweight, which means investors should buy the stock, and owns none. “This is the second quarter in a row they’ve missed earnings on costs.”
Noble reported fourth-quarter earnings of 50 cents a share, 10 cents lower than the average of 17 analysts’ estimates compiled by Bloomberg. The company reported contract drilling costs for the quarter of $484 million, which was 6 percent higher than the $458 million expected by J. David Anderson, an analyst at JP Morgan Chase and Co., according to a note he sent to investors.
“Our operational performance was a significant disappointment in 2012,” Chief Executive Officer David Williams said on the call.