Nabors Industries Ltd. (NBR Quick QuoteNBR - Free Report) reported a fourth-quarter 2021 loss from continuing operations of $14.60 per share, wider than the Zacks Consensus Estimate of a loss of $10.98. This underperformance was primarily due to higher year-over-year total costs and expenses.

However, the loss was narrower than the year-ago loss of $23.82 per share due to better-than-expected sales from the U.S Drilling unit, Drilling Solutions unit, and the Rig Technologies unit.  

Quarterly revenues of $543.69 million missed the Zacks Consensus Estimate of $551 million. However, the top line improved from the year-ago level of $446.74 million.

Nabors’ adjusted EBITDA rose from $108.1 million to $131.6 million year over year.

Segmental Performances

U.S. Drilling generated quarterly operating revenues of $192.3 million, up 43.4% from the year-ago level of $134.1 million, substantially surpassing the Zacks Consensus Estimate of $173 million due to an increase in rig count. The segment recorded an operating loss of $12.6 million, narrower than the year-ago loss of $26.2 million.

International Drilling’s operational revenues of $271 million increased from the year-ago quarter’s sales of $245 million on higher rig activity in Latin American markets. However, the unit’s sales missed the Zacks Consensus Estimate of $285 million. The segmental operating loss came in at $5.7 million in the reported quarter, narrower than the prior-year quarter’s loss of $35.5 million.

Revenues from the Drilling Solutions segment rose 61.9% to $51.8 million in the fourth quarter from about $32 million a year ago. The same outpaced the Zacks Consensus Estimate of $49.3 million due to increased acceptance of NBR’s product lines in the United States and international markets. Additionally, the unit’s operating income of $12.9 million turned around from the year-ago loss of $2.5 million.

Rig Technologies revenues increased 71.2% to $46.9 million from the prior-year level of $27.4 million. The metric also surpassed the Zacks Consensus Estimate of $44 million for increased aftermarket sales. Moreover, the segment’s operating income came in at $1.5 million against the prior-year loss of $2 million.

Nabors Industries Ltd. Price, Consensus and EPS Surprise

   
       
   
   

Nabors Industries Ltd. price-consensus-eps-surprise-chart | Nabors Industries Ltd. Quote

Financial Position

Nabors’ total costs and expenses increased to $634.6 million from $511.8 million in the year-ago quarter, reflecting higher general & administrative costs and much higher direct expenses.  

As of Dec 31, 2021, the company had $991.5 million in cash and short-term investments and long-term debt of about $3.3 billion with total debt-to-total capital of 81.9%.

Nabors generated free cash flow of $50.1 million in the fourth quarter and $311.6 million during full-year 2021.

Guidance

Nabors’ first-quarter 2022 average Lower 48 rig count is expected to increase by around 9-10 over the fourth-quarter average, while the daily margin is predicted between $7,500 and $7,600.

This Hamilton-based entity’s International Drilling segment’s first-quarter 2022 daily drilling margin is anticipated at around $13,000, with the number of rigs essentially unchanged sequentially. The company expects first-quarter 2022 EBITDA for Drilling Solutions to be approximately equal to the December 2021 quarter level. Finally, adjusted EBITDA for NBR’s Rig Technologies segment should at least break even.

Capital expenditure for the first quarter of 2022 is to be in the range of $95 million-$100 million, with approximately $35 million for SANAD newbuilds.

Zacks Rank & Key Picks

Nabors currently has a Zacks Rank #3 (Hold).

Investors interested in the energy sector might look at the following stocks that presently sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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