Nabors Industries Ltd. (NBR Quick QuoteNBR - Free Report) reported loss per share of $4.29 in the second quarter of 2024, wider than the Zacks Consensus Estimate of a loss of $1.77 per share and the year-ago quarter’s reported loss of $2.26. The underperformance was primarily due to poor contributions from NBR’s U.S. Drilling and Rig Technologies segments and higher year-over-year total costs and expenses.

Operating revenues of $734.8 million missed the Zacks Consensus Estimate of $741 million and decreased from the year-ago quarter’s level of $767.1 million.

Adjusted EBITDA decreased to $218.1 million from $235 million recorded a year ago. It also missed our model estimate of $228.6 million.

Segmental Performances

U.S. Drilling generated operating revenues of $259.7 million, down 17.5% from the year-ago quarter’s level of $314.8 million. The figure also missed our model estimate of $291.8 million. Operating profit totaled $45.1 million compared with $75.4 million in the year-ago quarter. The figure missed our estimated profit of $58.2 million.

International Drilling’s operational revenues of $356.7 million increased from $337.7 million a year ago. The unit’s top line beat our estimate of $352.7 million. Operating profit totaled $23.7 million compared with the prior-year quarter’s level of $10.4 million. The figure also surpassed our estimated profit of $15.7 million.

Revenues from the Drilling Solutions segment totaled $83 million, up 7.9% from $76.9 million recorded in the prior-year quarter. The top line beat our estimate of $76.9 million. Additionally, the unit’s operating income of $27.3 million was lower than the year-ago quarter’s figure of $28.4 million. However, it surpassed our projection of $26.4 million.

Revenues from Rig Technologies totaled $49.5 million, down 22.2% from the prior-year quarter’s level of $63.6 million. The top line beat our projection of $29.6 million. The segment’s operating profit totaled $4.9 million compared with the prior-year quarter’s level of $5.1 million. The figure beat our projection of $3.8 million.

Financial Position

Nabors’ total costs and expenses increased to $740.5 million from $736.1 million in the year-ago quarter, reflecting higher research and engineering, depreciation and amortization, interest expense and other expenses. Additionally, the amount surpassed our prediction of $722.8 million.

As of Jun 30, 2024, this Zacks Rank #3 (Hold) company had $473.6 million in cash and short-term investments. Long-term debt was about $2.5 billion, with a total debt-to-total capital of 83.4%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

In the second quarter of 2024, Nabors generated $57 million in adjusted free cash flow. Capital expenditures totaled $138 million, with $56 million allocated for new builds in Saudi Arabia.

Guidance

NBR’s management anticipates that its pipeline of scheduled international deployments will boost the rig count by at least 20% from the end of 2023 to the end of 2025. This growth will include rigs deployed in Algeria, Argentina, Kuwait and Saudi Arabia.

For the third quarter of 2024, Nabors expects the average rig count in the U.S. drilling segment to be around 70. It also expects a daily margin between $15,200 and $15,500. The adjusted EBITDA for Alaska and the Gulf of Mexico is estimated to be $20 million.

Nabors anticipates that for the International Drilling segment in the third quarter of 2024, the average rig count will increase by one rig compared to the second quarter average, alongside a daily adjusted gross margin of between $16,200 and $16,300.

In terms of financial performance, NBR expects a sequential Adjusted EBITDA increase of 6% for its Drilling Solutions segment. The company anticipates adjusted EBITDA up sequentially by $1.5 million for its Rig Technologies segment.

Furthermore, Nabors expects third-quarter 2024 capital expenditures to be $190-$200 million, with $80-$85 million for new projects in Saudi Arabia. The full-year capital expenditure estimate is around $590 million, including funds for recent rig awards. Additionally, NBR anticipates a full-year adjusted free cash flow of $100-$200 million.

Important Energy Earnings So Far

While it's early in the earnings season, there have been a few key energy releases thus far. Let’s glance through a couple of them.

Liberty Energy (LBRT Quick QuoteLBRT - Free Report) , the Denver-CO-based oil and gas equipment company, announced second-quarter 2024 adjusted earnings of 61 cents per share, which marginally beat the Zacks Consensus Estimate of 60 cents. However, LBRT’s bottom line underperformed the year-ago quarter’s reported figure of 87 cents due to a year-over-year increase in costs and expenses.

Ahead of the earnings release, Liberty’s board of directors announced a cash dividend of 7 cents per common share, payable on Sep 20, 2024, to its stockholders of record as of Sep 6. As part of its shareholder return policy, LBRT repurchased the company’s shares worth $30 million at an average price of $20.39 per share in the reported quarter. Liberty returned $41 million to its shareholders through share repurchases and cash dividends.

Houston, TX-based Halliburton Company (HAL Quick QuoteHAL - Free Report) , an oil and gas equipment and services provider, reported second-quarter 2024 adjusted net income per share of 80 cents, in line with the Zacks Consensus Estimate and above the year-ago quarter profit of 77 cents (adjusted). The robust numbers reflect strength in the international markets.

As of Jun 30, 2024, the company reported $2.1 billion in cash and cash equivalents and $7.6 billion in long-term debt, representing a debt-to-capitalization ratio of 43.2. HAL also bought back $250 million worth of its stock in the April-June period. The company generated $1.1 billion of cash flow from operations in the second quarter, leading to a free cash flow of $793 million.  

Meanwhile, energy infrastructure provider Kinder Morgan (KMI Quick QuoteKMI - Free Report) reported second-quarter adjusted earnings per share of 26 cents, in line with the Zacks Consensus Estimate. The bottom line was favorably impacted by strong financial contributions from the Natural Gas Pipelines, Products Pipelines and Terminals business segments. Moreover, KMI’s second-quarter discounted cash flow (DCF) was $1.10 billion, up from $1.07 billion a year ago.