Noble Energy’s Stock Price Action after its 4Q15 Earnings

Noble Energy Beat 4Q15 Earnings Estimates—What's Its Secret?

(Continued from Prior Part)

Noble Energy’s stock price after 4Q15 results

Noble Energy (NBL) announced its 4Q15 earnings before the market opened on February 17, 2016. After the announcement, NBL’s stock price increased by about 6.2% and closed at $30.42 that day. But it should be noted that in last four weeks leading up to the earnings release, NBL’s stock price had already increased by ~19%, mainly due to the ~11% increase in crude oil prices during that period.

Stock price in downtrend, NBL’s relative performance in 2015

Declining crude oil and natural gas prices during the past year have dragged the entire upstream sector into a downtrend. As seen in above chart, currently NBL’s stock price is also in a downtrend, meaning that it is making a clear pattern of lower highs and lower lows.

For 2015, NBL underperformed bigger upstream companies in the S&P 500 (SPY), losing ~29% while oil and gas producers Occidental Petroleum (OXY), Pioneer Natural Resources (PXD), and EOG Resources (EOG) were down only ~13%, ~16%, and ~23%, respectively.

Still beating expectations

In the past year, there were three occasions—2Q15, 1Q15, and 4Q15—when NBL beat its earnings expectations. NBL reported its 2Q15 earnings before the market opened on August 3, 2015, and excluding the one-time items, it reported a profit of $0.26 per share, which was $0.21 better than the consensus estimate of a $0.06 per-share profit. But following that earnings release, better-than-expected earnings saw NBL’s stock price decrease by ~9% over the subsequent three weeks.

A similar contrary reaction was observed after NBL’s 1Q15 and 4Q14 earnings, when the stock price plunged by ~17% and ~16%, respectively, over the three weeks following its earnings release, even after beating the estimates by $0.01 per share, and $0.04 per share, respectively, for those fiscal quarters.

For further analysis, keep checking in with Market Realist’s Energy and Power page.

Browse this series on Market Realist:

• Part 1 - Analyzing Noble Energy’s 4Q15 Earnings Performance

• Part 2 - Noble Energy’s 4Q15 Operational Performance and Management Strategies

• Part 3 - Wall Street Analyst Forecasts after Noble Energy’s 4Q15 Earnings