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Nabors (NBR) Stock Down 16.8% Since Q3 Earnings Release
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Shares of Nabors Industries Ltd. (NBR - Free Report) have dropped 16.8% since the company’s third-quarter 2021 earnings announcement on Oct 26.
This downward stock movement could possibly be triggered by a wider-than-expected loss reported for the third quarter, the year-over-year increase in total costs and expenses and a lack of contribution from the company’s recently sold Canadian Drilling unit.
Delving Deeper
Nabors reported third-quarter 2021 loss from continuing operations (excluding special items) of $14.16 per share, wider than the Zacks Consensus Estimate of a loss of $12.9. 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 $22.81, attributable to better-than-expected sales from the International Drilling unit, Drilling Solutions unit and the Rig Technologies unit.
Quarterly revenues of $524.37 million beat the Zacks Consensus Estimate of $504 million. Moreover, the top line improved from the year-ago level of $437.61 million.
Year over year, Nabors’ adjusted EBITDA rose from $114.2 million to $125.2 million.
Segmental Performances
U.S. Drilling generated quarterly operating revenues of $173.4 million, up 33.2% from the year-ago level of $130.2 million and marginally surpassed the Zacks Consensus Estimate owing to increase in average Lower 48 rig count. The segment recorded an operating loss of $19.7 million, narrower than the year-ago loss of $39.2 million.
Canadian Drilling’s revenues of $6.03 million in the quarter under review decreased from the year-ago figure of $10.8 million. The segment’s operating income came in at $1.37 million against the year-ago quarter’s loss of $3.5 million.
International Drilling’s operational revenues of $270 million increased from the year-ago quarter’s sales of $248.4 million and outpaced the Zacks Consensus Estimate of $266 million, attributable to the reactivation of drilling rigs that had been idled in Saudi Arabia for quite some time. The segmental operating loss came in at $7.3 million in the reported quarter, narrower than the prior-year quarter’s loss of $16.9 million.
Revenues from the Drilling Solutions rose 56.7% to $45.9 million in the third quarter from $29.3 million a year ago. The same outpaced the Zacks Consensus Estimate of $43 million, attributable to increased activity across all service lines. Performance drilling software and casing running services were the primary contributors to this improvement. Moreover, the unit’s operating income of $8.6 million came against the year-ago loss of $3.6 million.
Revenues from the Rig Technologies segment climbed 47.7% to $42.1 million from the prior-year level of $28.5 million. The metric also surpassed the Zacks Consensus Estimate of $39.9 million on increased overseas deliveries of capital equipment. Moreover, the segment’s operating income came in at $1.9 million against the prior-year loss of $1.8 million.
Nabors Industries Ltd. Price, Consensus and EPS Surprise
Total costs and expenses increased to $637.3 million from $588 million in the year-ago quarter, reflecting higher general & administrative costs as well as higher direct expenses.
As of Sep 30, 2021, the company had $771.9 million in cash and short-term investments, and a long-term debt of $3.1 billion with total debt-to-total capital of 78.7%.
Nabors generated free cash flow of $133.1 million in the third quarter.
Guidance
Nabors’ fourth-quarter 2021 average Lower 48 rig count is anticipated to be in line with the third-quarter level, which is at 68 rigs.
This Hamilton-based entity’s International Drilling segment’s fourth-quarter 2021 drilling margin is estimated to decline slightly. The company expects December-quarter adjusted EBITDA for Drilling Solutions to increase by roughly 10% from the September-quarter results.
Capital expenditures for 2021 are projected to reach $270 million with around $90 million funded by SANAD to support the rig newbuild program. This amounts to $91 million of anticipated fourth-quarter capital expenditures with $32 million projected for SANAD newbuilds.
Image: Bigstock
Nabors (NBR) Stock Down 16.8% Since Q3 Earnings Release
Shares of Nabors Industries Ltd. (NBR - Free Report) have dropped 16.8% since the company’s third-quarter 2021 earnings announcement on Oct 26.
This downward stock movement could possibly be triggered by a wider-than-expected loss reported for the third quarter, the year-over-year increase in total costs and expenses and a lack of contribution from the company’s recently sold Canadian Drilling unit.
Delving Deeper
Nabors reported third-quarter 2021 loss from continuing operations (excluding special items) of $14.16 per share, wider than the Zacks Consensus Estimate of a loss of $12.9. 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 $22.81, attributable to better-than-expected sales from the International Drilling unit, Drilling Solutions unit and the Rig Technologies unit.
Quarterly revenues of $524.37 million beat the Zacks Consensus Estimate of $504 million. Moreover, the top line improved from the year-ago level of $437.61 million.
Year over year, Nabors’ adjusted EBITDA rose from $114.2 million to $125.2 million.
Segmental Performances
U.S. Drilling generated quarterly operating revenues of $173.4 million, up 33.2% from the year-ago level of $130.2 million and marginally surpassed the Zacks Consensus Estimate owing to increase in average Lower 48 rig count. The segment recorded an operating loss of $19.7 million, narrower than the year-ago loss of $39.2 million.
Canadian Drilling’s revenues of $6.03 million in the quarter under review decreased from the year-ago figure of $10.8 million. The segment’s operating income came in at $1.37 million against the year-ago quarter’s loss of $3.5 million.
International Drilling’s operational revenues of $270 million increased from the year-ago quarter’s sales of $248.4 million and outpaced the Zacks Consensus Estimate of $266 million, attributable to the reactivation of drilling rigs that had been idled in Saudi Arabia for quite some time. The segmental operating loss came in at $7.3 million in the reported quarter, narrower than the prior-year quarter’s loss of $16.9 million.
Revenues from the Drilling Solutions rose 56.7% to $45.9 million in the third quarter from $29.3 million a year ago. The same outpaced the Zacks Consensus Estimate of $43 million, attributable to increased activity across all service lines. Performance drilling software and casing running services were the primary contributors to this improvement. Moreover, the unit’s operating income of $8.6 million came against the year-ago loss of $3.6 million.
Revenues from the Rig Technologies segment climbed 47.7% to $42.1 million from the prior-year level of $28.5 million. The metric also surpassed the Zacks Consensus Estimate of $39.9 million on increased overseas deliveries of capital equipment. Moreover, the segment’s operating income came in at $1.9 million against the prior-year loss of $1.8 million.
Nabors Industries Ltd. Price, Consensus and EPS Surprise
Nabors Industries Ltd. price-consensus-eps-surprise-chart | Nabors Industries Ltd. Quote
Financials
Total costs and expenses increased to $637.3 million from $588 million in the year-ago quarter, reflecting higher general & administrative costs as well as higher direct expenses.
As of Sep 30, 2021, the company had $771.9 million in cash and short-term investments, and a long-term debt of $3.1 billion with total debt-to-total capital of 78.7%.
Nabors generated free cash flow of $133.1 million in the third quarter.
Guidance
Nabors’ fourth-quarter 2021 average Lower 48 rig count is anticipated to be in line with the third-quarter level, which is at 68 rigs.
This Hamilton-based entity’s International Drilling segment’s fourth-quarter 2021 drilling margin is estimated to decline slightly. The company expects December-quarter adjusted EBITDA for Drilling Solutions to increase by roughly 10% from the September-quarter results.
Capital expenditures for 2021 are projected to reach $270 million with around $90 million funded by SANAD to support the rig newbuild program. This amounts to $91 million of anticipated fourth-quarter capital expenditures with $32 million projected for SANAD newbuilds.
Zacks Rank & Key Picks
Nabors currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the energy space are Cheniere Energy (LNG - Free Report) , Diamondback Energy, Inc. (FANG - Free Report) and Continental Resources, Inc. , each presently flaunting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.