Nabors (NBR) Q3 Loss Wider Than Expected, Revenues Miss

On Oct 25, Nabors Industries Ltd. (NYSE:NBR) reported third-quarter 2016 adjusted loss from continuing operations of 35 cents per share, wider than the Zacks Consensus Estimate of a loss of 33 cents. The wider-than-expected quarterly loss may be attributed to lower rig activity. The quarterly figure was also wider than the year-ago adjusted loss of 14 cents per share.

Total revenue of $520 million came in below the Zacks Consensus Estimate of $550 million and also plunged almost 35.9% from $812.4 million in third-quarter 2015.

Nabors’ U.S. operations generated quarterly revenues of $116.1 million, down 55.3% from the year-ago level. The deterioration stemmed from an operating loss of $58.9 million as against a loss of $14 million in the prior-year period.

The Canadian market witnessed a year-over-year decline of 65.2% in revenues and recorded sales of $10.4 million. Moreover, the segment’s quarterly loss of $10.2 million was substantially wider than an operating loss of $4.1 million in the year-ago quarter. Lower rig activity was the primary reason behind the deterioration.

NABORS IND Price, Consensus and EPS Surprise

Nabors’ international operations saw a 29.6% year-over-year decline in revenues to $363.6 million. Operating income plunged 41.1% from third-quarter 2015 to $43.6 million.

Revenues at the Rig Services segment decreased 19.9% from the prior-year quarter to $58.9 million. The unit incurred loss of $12.9 million, wider than a loss of $10.4 million in the year-earlier quarter.

Direct Cost

Direct expenses related to operations came in at $306.4 million, down 40.9% from the year-ago quarter.

Balance Sheet

As of Sep 30, 2016, the company had $200.7 million in cash and short-term investments and $3,475.9 million in long-term debt, with a debt-to-capitalization ratio of approximately 49.1%.

Zacks Rank

Nabors currently has a Zacks Rank #3 (Hold), implying that the stock will perform in line with the broader U.S. equity market over the next one to three months.

Some better-ranked players from the broader energy sector include Enviva Partners, LP (NYSE:EVA) , Ultra Petroleum Corp. (OTC:UPLMQ) and CONE Midstream Partners LP (NYSE:CNNX) . All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

In the last four quarters, Enviva Partners posted an average positive earnings surprise of 0.19%.

Ultra Petroleum, on the other hand, posted an average positive earnings surprise of 65.91% in the last four quarters.

In the current quarter, CONE Midstream Partners posted a positive earnings surprise of 19.38%.

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