Did you analyze how DNOW (DNOW Quick QuoteDNOW - Free Report) fared in its international operations for the quarter ending September 2024? Given the widespread global presence of this energy and industrial distribution company, scrutinizing the trends in international revenues becomes imperative to assess its financial strength and future growth possibilities.

In the modern, closely-knit global economic landscape, the capacity of a business to access foreign markets is often a key determinant of its financial well-being and growth path. Investors now place great importance on grasping the extent of a company's dependence on international markets, as it sheds light on the firm's earnings stability, its skill in leveraging various economic cycles and its broad growth potential.

Presence in international markets can act as a hedge against domestic economic downturns and provide access to faster-growing economies. However, this diversification also brings complexities due to currency fluctuations, geopolitical risks and differing market dynamics.

While analyzing DNOW's performance for the last quarter, we found some intriguing trends in revenues from its overseas segments that Wall Street analysts commonly model and monitor.

The company's total revenue for the quarter amounted to $606 million, marking an increase of 3.1% from the year-ago quarter. We will next turn our attention to dissecting DNOW's international revenue to get a clearer picture of how significant its operations are outside its main base.

Unveiling Trends in DNOW's International Revenues

Of the total revenue, $65 million came from Canada during the last fiscal quarter, accounting for 10.73%. This represented a surprise of +9.06% as analysts had expected the region to contribute $59.6 million to the total revenue. In comparison, the region contributed $56 million, or 8.85%, and $68 million, or 11.56%, to total revenue in the previous and year-ago quarters, respectively.

International generated $59 million in revenues for the company in the last quarter, constituting 9.74% of the total. This represented a surprise of -11.28% compared to the $66.5 million projected by Wall Street analysts. Comparatively, in the previous quarter, International accounted for $65 million (10.27%), and in the year-ago quarter, it contributed $72 million (12.24%) to the total revenue.

International Revenue Predictions

Wall Street analysts expect DNOW to report $544 million in total revenue for the current fiscal quarter, indicating a decline of 2% from the year-ago quarter. Canada and International are expected to contribute 11.3% ($61.2 million) and 12.7% ($69.1 million) to the total revenue, respectively.

Analysts expect the company to report a total annual revenue of $2.34 billion for the full year, marking an increase of 0.9% compared to last year. The expected revenue contributions from Canada and International are projected to be 10.4% ($242.8 million) and 11.2% ($262.5 million) of the total revenue, in that order.

The Bottom Line

Relying on international markets for revenues, DNOW faces both prospects and perils. Thus, tracking the company's international revenue trends is essential for accurately projecting its future trajectory.

In an environment where global interconnections and geopolitical skirmishes are intensifying, Wall Street analysts keep a keen eye on these trends, particularly for firms with overseas operations, to adjust their earnings predictions. Moreover, a range of other aspects, including how a company fares in its home country, significantly affects these projections.

Here at Zacks, we put a great deal of emphasis on a company's changing earnings outlook, as empirical research has shown that's a powerful force driving a stock's near-term price performance. Quite naturally, the correlation is positive here -- an upward revision in earnings estimates drives the stock price higher.

Our proprietary stock rating tool, the Zacks Rank, with its externally validated exceptional track record, harnesses the power of earnings estimate revisions to serve as a dependable measure for anticipating the short-term price trends of stocks.

At the moment, DNOW has a Zacks Rank #4 (Sell), signifying that it may underperform the overall market trend in the upcoming period. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Examining the Latest Trends in DNOW's Stock Value

Over the past month, the stock has seen an increase of 11.6% in its value, whereas the Zacks S&P 500 composite has posted an increase of 4.4%. The Zacks Industrial Products sector, DNOW's industry group, has ascended 4.9% over the identical span. In the past three months, there's been an increase of 12.4% in the company's stock price, against a rise of 13.1% in the S&P 500 index. The broader sector has increased by 13.1% during this interval.