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Nabors (NBR) Down 13.3% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for Nabors Industries (NBR - Free Report) . Shares have lost about 13.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Nabors due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Nabors Q2 Loss Wider Than Expected
Nabors Industries 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, the 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%.
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.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision flatlined during the past month.
The consensus estimate has shifted -27.43% due to these changes.
VGM Scores
At this time, Nabors has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Nabors has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Nabors (NBR) Down 13.3% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Nabors Industries (NBR - Free Report) . Shares have lost about 13.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Nabors due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Nabors Q2 Loss Wider Than Expected
Nabors Industries 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, the 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%.
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.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision flatlined during the past month.
The consensus estimate has shifted -27.43% due to these changes.
VGM Scores
At this time, Nabors has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Nabors has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.