Noble (NE) Q3 2026 earnings review
Noble wins contracts for 2027, but fourth-quarter profit steps down
Noble Corporation, the offshore oil and gas driller, booked a wave of contracts for 2027 while its near-term profit kept falling. Third-quarter revenue slipped 9% from a year ago to $729 million as ships moved between jobs, and a tax charge pushed the net loss to $117 million. Both suspended rigs in Brazil returned to work, but chief executive Robert W. Eifler trimmed the top of the full-year profit target, which by our math points to a 12% quarterly revenue drop in the fourth quarter.
| Revenue | $729M -9% from a year ago (+1% from Q2) |
|---|---|
| Adjusted EBITDA | $201M -21% from a year ago (-5% from Q2) |
| New contracts won | $560M 2027 backlog up to $2.6B from $2.3B |
| Full-year Adjusted EBITDA outlook | Cut $12.5M middle of the range: $875M (-21% from 2025) |
⚖️ Verdict: 🟢 Bullish
The story got better because Noble solved its two biggest operational headaches: it put both suspended Brazil rigs back to work and won $560 million of contracts that fill three of its five open deepwater ships for 2027. That raised next year's scheduled backlog from $2.3 billion to $2.6 billion. The bad news: heavy rig upgrade spending and the $80 million quarterly dividend exceeded cash flow again, pushing net debt up by $119 million to $1.55 billion.
The question now is how much cash Noble will burn during the next three quarters before those new contracts start up in the second half of 2027. Either falling upgrade costs and asset sales cover the dividend through the dip, or borrowing keeps climbing while rigs wait for their next jobs. The 2027 capital spending budget in February's fourth-quarter release will tell.
🐂 Bull Case
New Contracts Fill Open Rigs for 2027
Noble's plan for a rebound next year depended on finding work for its uncontracted deepwater ships and jackups, which are shallow-water rigs with legs that stand on the seafloor. Since July, the offshore driller won $560 million in new contracts across West Africa, South America and Norway. That nearly matched the $684 million of drilling work it completed in the quarter, so total backlog — contracted future revenue — edged down only from $6.8 billion to $6.7 billion.
- 2027 backlog: $2.6 billion, up from $2.3 billion three months ago
- 2027 fleet days committed: 72% across all 28 marketed rigs, up from 65% in July
- Marketed floaters under contract: 66% in the third quarter, up from 64% in the second quarter
- New backlog duration: 44 months added for deepwater floaters and 26 months for jackups
These deals matter because they put specific idle rigs back to work. Noble booked multi-well programs for three of the five deepwater ships that had open schedules — BlackRhino in Nigeria, Faye Kozack in Ghana and BlackHawk in Uruguay — plus Peru and West Africa work for Globetrotter I and a 670-day Norway campaign for the jackup Interceptor. Chief executive Robert W. Eifler said the company now has about 20% more contracted capacity in the second half of 2027 than in the first half.
What to watch: contracts for the remaining open drillships, including Stanley Lafosse and Valiant, in next quarter's fleet status report. Filling those gaps would lock in the utilization step-up that management's second-half 2027 cash flow target requires.
Both Suspended Rigs in Brazil Resumed Work
Last quarter, regulator-ordered operational suspensions on two rigs in Brazil — Noble Faye Kozack and Noble Courage — cut revenue and profit by $43 million and forced management to lower its full-year plan. Eifler said the third quarter "marked the successful resumption of operations for both of our rigs in Brazil", removing the risk of an open-ended shutdown with its largest deepwater customer, Petrobras.
Because the two rigs are working again, Noble raised the bottom of its full-year revenue outlook by $50 million, to $2.85 billion, and kept the floor of its profit target intact. Furthermore, winning a five-well contract with Tullow in Ghana for Faye Kozack starting in mid-2027 reduces Noble's reliance on Brazil once that rig's current contract ends.
What to watch: any financial settlement or backlog adjustment with Petrobras in the third-quarter filing. A clean resolution would confirm that the Brazil suspensions will not drag on first-quarter 2027 revenue.
Jackup Pricing Climbs and Deepwater Rates Hold
A central debate is whether idle time across the industry will force drillers to cut their prices. For Noble's five marketed ultra-harsh jackups — rigs built for rough seas like Norway — utilization rose from 80% in the second quarter to 86% in the third. Average jackup dayrates, the daily rental fee paid by oil companies, climbed 5.2% from last quarter to $207,651, and new contracts are signing between $230,000 and $300,000.
On deepwater floaters, the average realized dayrate dipped 2.3% from last quarter to $403,113 as rigs moved between jobs. However, Noble said leading-edge dayrates on new contracts for its top-tier drillships are ranging from the mid-$400,000s to $500,000, and Occidental booked the lower-tier Globetrotter I in Peru at $400,000 a day. Because new contracts are signing above current averages, pricing will support revenue once utilization recovers.
What to watch: realized floater dayrates in the fourth quarter and first quarter, when four ships working for ExxonMobil in Guyana reset their prices to market rates. A move back above $415,000 a day would show that high headline contract rates are flowing into revenue.
🐻 Bear Case
The Outlook Points to a Deeper Drop in Q4
Eifler points investors toward "an expected meaningful inflection in fleet utilization and cash flow starting H2 2027". That recovery date has slipped several times over the past year, and the company's narrowed 2026 outlook shows that the current downturn is getting worse before it gets better.
- Implied Q4 revenue: $641 million at the middle of the range by our math, down 16.2% from a year ago and down 12.1% from Q3
- Implied Q4 adjusted EBITDA: $184 million at the middle of the range by our math, down 20.7% from a year ago and down 8.3% from Q3
- Full-year Adjusted EBITDA ceiling: cut by $25 million, narrowing the range to $850–$900 million
- 2026 fleet days committed: 78% for the full year, leaving almost a quarter of marketed capacity uncontracted
The fourth-quarter step-down happens because many of the newly signed contracts do not start until the middle or late part of 2027. Until those programs begin, gaps between contracts keep ships idle and push quarterly profit to its lowest level in over two years.
What to watch: initial full-year 2027 revenue and Adjusted EBITDA targets when Noble reports fourth-quarter results in February. If the first half of 2027 stays near the fourth-quarter run rate of $184 million, the company will need an unusually steep jump in late 2027 to hit its cash flow goals.
Dividends and Rig Upgrades Push Borrowing Higher
Noble declared another $0.50 per share quarterly dividend — about $80 million in cash — to maintain its return of capital program. However, the business is not generating the cash to pay for it right now because earnings are falling while spending to upgrade and reactivate rigs stays high.
- Third-quarter free cash flow: negative $48 million, after $144 million of operating cash flow and $192 million of capital spending
- Nine-month free cash flow: $63 million by our math, compared with $243 million paid out in dividends
- Net debt: $1,551 million, up from $1,432 million in the second quarter and $1,255 million in the first quarter
- Net leverage: 1.9 times annualized Adjusted EBITDA, up from 1.7 times last quarter and 1.1 times in Q1
Asset sales are helping bridge the gap: closing the Noble Resolve sale brought in $45 million in October, and selling Globetrotter II will bring $38 million in the fourth quarter. Even so, by our math the full-year outlook implies another $192 million of capital spending in the fourth quarter against $184 million of Adjusted EBITDA, so free cash flow will stay negative and net debt will rise again.
What to watch: the 2027 capital spending budget in the fourth-quarter release. Unless upgrade spending drops sharply after current rig reactivations finish, Noble will keep borrowing to fund its dividend through the first half of 2027.
Rig Moves and Taxes Deepened the Loss
Noble's third-quarter revenue edged up 1.3% from the second quarter to $729 million, but Adjusted EBITDA — profit before interest, taxes, depreciation and one-offs — fell 5.4% to $201 million. Eifler said the quarter was hurt by "several other rigs across the fleet transitioning between contracts". When rigs move between jobs, daily revenue stops while crew and preparation expenses continue.
Contract drilling services costs, the direct expense of running the rigs, rose to 64.3% of total revenue, up 4.2 percentage points from a year ago and up 2.3 points from last quarter by our math. That pushed the Adjusted EBITDA margin down to 27.6% from 31.9% a year ago. Below the operating line, the income tax provision jumped to $133 million from $16 million last quarter, driving the net loss to $117 million, or $0.73 per share.
What to watch: the tax footnote in the third-quarter 10-Q filing to see whether the $133 million tax charge required cash payments or was a non-cash accounting adjustment.
👓 Other Themes
Higher Oil Prices Have Not Lifted Rig Demand
Crude prices rose during 2026, which normally encourages oil companies to hire more offshore rigs. Eifler noted that contract coverage and dayrates are improving "despite limited apparent demand tailwinds arising from higher oil prices during 2026 thus far". Instead of a broad spending boom, Noble is piecing together backlog from diverse jobs — from frontier exploration in Uruguay to plugging old wells in Norway — while customers remain cautious on near-term budgets.
💲 Other KPIs
Money owed by customers rose 11.7% from the second quarter and 3.8% from year-end 2025, outpacing the 1.3% quarterly rise in revenue. Along with a $103 million jump in prepaid expenses since December, this tied up cash and kept third-quarter operating cash flow flat at $144 million.
Corporate overhead costs fell 18.1% from a year ago and stayed flat against the second quarter's $26.9 million. Overhead took up 3.7% of revenue compared with 4.2% a year ago, helping offset part of the rise in rig operating costs after the Diamond Offshore integration finished.
Cash received from selling older rigs more than doubled from $101.9 million in the first nine months of 2025. After the quarter ended, Noble collected another $45 million from closing the Noble Resolve sale on October 9 and expects $38 million from selling Noble Globetrotter II in the fourth quarter.
🔮 Guidance
Raised at the low end. The middle of the range moved up $25 million to $2,875 million, which leaves full-year sales down 12.5% from 2025 by our math. With $2,234 million recorded in the first nine months, the plan implies fourth-quarter revenue of $641 million at the middle of the range — down 12.1% from the third quarter and down 16.2% from a year ago. Across four quarters, the middle of the range moved from $2,900 million to $2,850 million and now $2,875 million.
Cut at the top end. The middle of the range moved down $12.5 million to $875 million, a 20.9% drop from 2025 by our math. After $691 million in the first nine months, the outlook leaves $184 million for the fourth quarter — down 8.3% from the third quarter as rigs transition between contracts. The middle of the range has fallen in two consecutive quarters: from $980 million to $887.5 million, and now $875 million.
Raised. The middle of the range increased by $52.5 million to $692.5 million, up 33.3% from 2025. Noble said the increase is "primarily attributable to higher customer reimbursable Capital Expenditures", which rose by $40 million to $65 million as clients pay upfront for rig upgrades. By our math, the plan leaves $192 million of capital spending for the fourth quarter, matching the third quarter's $192 million.
Unchanged. The board approved a $0.50 per share dividend for the fourth quarter, payable December 17, keeping the annualized payout at roughly $320 million despite negative free cash flow in the second and third quarters.
❓ Key Questions
Why did the tax bill jump to $133 million?
The third-quarter income tax provision rose to $133 million from $16 million in the second quarter, even though pre-tax income was only $16 million. Investors need to know how much of this charge will require cash tax payments.
How much will capital spending drop in 2027?
Management previously indicated that capital spending would fall toward $400 million in 2027 after rig reactivations finish. With 2026 spending raised to $680–$705 million and new 2027 contracts signed, does that lower 2027 budget still hold?
Is the Petrobras suspension dispute financially settled?
Both suspended rigs in Brazil resumed work in the third quarter, but last quarter Noble warned of at least $15 million in further revenue reductions through January 2027. Did Noble reach a final administrative settlement with Petrobras?
Is Borr Drilling paying cash interest on its loan?
When Noble sold five jackups to Borr Drilling in the first quarter, it lent the buyer $150 million with an option to pay interest in additional debt rather than cash. Are those interest payments arriving in cash?