Noble Corp reports disappointing profit, lowers capex

July 27 (Reuters) – Rig contractor Noble Corp Plc reported a lower-than-expected quarterly profit and lowered its 2016 capital expenditure as oil producers reduced spending to weather a prolonged slump in crude prices.

Average price of internationally traded Brent crude fell about 26 percent in the second quarter from a year earlier, leading to a steep decline in drilling activity.

Noble lowered its full-year capital expenditure estimate to $675 million from $800 million, saying “industry conditions remain challenging.”

The company’s second-quarter results, however, were helped by a gain of $379 million from a settlement with Freeport-McMoRan Inc, which canceled a contract in the quarter.

Noble’s average day rate, the amount it receives per day for a rig, was $509,145 in the quarter ended June 30. Excluding the Freeport settlement, the company earned $280,884 per rig.

The company’s average day rate was $340,217 in the year-earlier quarter.

Net profit attributable to Noble rose to $322.9 million, or $1.28 per share, in the quarter, from $159 million, or 64 cents per share, a year earlier. The quarterly results included several net favorable after-tax items totaling $322 million.

On an adjusted basis, the company earned 1 cent per share, missing the average analyst estimate of 5 cents, according to Thomson Reuters I/B/E/S.

Noble’s operating revenue rose 12.8 percent to $894.8 million.

Excluding special items, revenue came in at $502 million.

(Reporting by Manish Parashar in Bengaluru; Editing by Savio D’Souza)