Noble Corp. PLC (NYSE: NE) reported third-quarter 2016 results after U.S. markets closed Thursday. The offshore oil and gas driller posted a quarterly diluted loss per share (EPS) of $0.23 on revenues of $385 million. In the same period a year ago, the company reported earnings per share of $0.72 on adjusted revenues of $760 million. Third-quarter results also compare to the consensus estimates for a loss per share of $0.20 on revenues of $408.3 million.

Third-quarter contract drilling revenues dropped from $877 million in 2015 to $373 million, including the cancellation of a contract with Freeport-McMoRan. Adjusting for that one-time event, revenues in the quarter totaled $484 million. Noble attributed the revenue decline to a reduction in fleet operating days, an increase in fleet downtime and lower demobilization revenues.

The company said that third-quarter contract drilling costs fell from $244 to $207 million sequentially. Drilling margin dropped from 52% in the second quarter of this year to 45% in the third quarter due to a 9% decline in fleet operating days, primarily in the floating rig fleet.

On October 28, Noble announced that it is eliminating its $0.02 quarterly dividend effective immediately. The company expects that action to result in cash savings of about $20 million a year.

David W. Williams, Noble’s board chair, president and chief executive, said:

Utilization of our jackup fleet remained healthy in the third quarter at 80 percent … . However, in our floating rig fleet, utilization in the third quarter declined from the previous quarter, reflecting the challenging offshore drilling conditions that persist. Also, fleet downtime in the quarter of six percent was slightly above guidance of five percent, and we experienced higher-than-expected shipyard days.

Financial metrics remained solid with cash and cash equivalents of $426 million and an undrawn revolver of $2.445 billion, or a liquidity position of $2.9 billion, and a debt-to-total-capitalization ratio of just below 35 percent. Capital expenditures over upcoming quarters will average significantly below third quarter spending of $472 million … .

In his outlook statement Williams said:

Our industry continues to work through a challenging period. However, we expect our business to improve over time, through a combination of further fleet attrition and a rebound in offshore spending by our customers. … We expect our efforts to result in a significant reduction in operating costs in 2017 when compared to our stated cost expectations for 2016. The anticipated reduction in costs, together with our backlog and strong fleet mix, should prove meaningful regarding our 2017 financial performance, including our expectation to remain cash flow positive. Preservation of liquidity remains a chief component of our financial strategy as we plan ahead. We expect our continued attention to strong and consistent operational execution, material reductions in capital expenditures, and the elimination of our quarterly dividend, to support our liquidity position, while helping to secure our favorable industry position into the future.

Consensus estimates for the fourth quarter call for a loss per share of $0.20 on revenues of $418.18 million. For the full year, analysts are looking for a loss of $0.07 per share on revenues of $1.94 billion.

The company’s share price has dropped about 50% in the year to date and nearer to 60% over the past 12 months.

Noble’s stock posted a gain on Thursday of nearly 8% to close at $5.02. Shares traded down about 2.8% in the after-hours market at $4.88 in a 52-week range of $4.61 to $14.31. The 12-month consensus price target was $6.61 before the results were announced.

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