Nabors Industries Ltd. NBR reported a first-quarter 2025 adjusted loss of $7.5 per share, which was wider than the Zacks Consensus Estimate of a loss of $2.64. This underperformance was mainly due to lower adjusted operating income from its U.S. Drilling segment.  Moreover, the bottom line deteriorated from the year-ago quarter’s reported loss of $5.16 per share. (See the Zacks Earnings Calendar to stay ahead of market-making news.)

The oil and gas drilling company’s operating revenues of $736.2 million beat the Zacks Consensus Estimate of $718 million, driven by stronger revenue contributions from the International Drilling segment. However, the figure decreased from the year-ago quarter’s $743.9 million due to poor year-over-year revenue contributions from the U.S. Drilling and Drilling Solutions segments.

On the other hand, adjusted EBITDA decreased to $206.3 million from $221 million recorded a year ago. The figure also missed our model estimate of $221.6 million.

Nabors Industries Ltd. Price, Consensus and EPS SurpriseNabors Industries Ltd. Price, Consensus and EPS Surprise

Nabors Industries Ltd. price-consensus-eps-surprise-chart | Nabors Industries Ltd. Quote

In March, Nabors finalized the acquisition of Parker Wellbore, strengthening its portfolio with complementary, strategically aligned assets. The deal adds Quail Tools, the top tubular rental provider in the United States, along with the leading casing running operations in Saudi Arabia and the UAE, and a fleet of 10 drilling rigs active in international markets and Alaska. The acquisition is anticipated to be immediately accretive to Nabors’ free cash flow in 2025 and to improve its leverage profile.

In the first quarter, the SANAD joint venture deployed its 10th newbuild rig. The 11th rig began operations in April and the 12th is scheduled to start later in the second quarter. Two more rigs are planned to come online in the second half of 2025. As these rigs are deployed, they are expected to significantly boost SANAD's adjusted EBITDA and support its customers’ efforts to sustain production capacity and expand natural gas development.

Nabors and Corva AI have expanded their strategic alliance by integrating Corva’s AI-driven analytics into the former’s RigCLOUD platform. This collaboration merges Nabors' edge and cloud computing capabilities with Corva’s advanced analytics to enhance real-time data processing, deliver predictive insights and boost operational performance, ultimately improving decision-making and maximizing efficiency.

In March, NBR suspended operations on its three rigs in Russia in response to recently expanded sanctions. Given the current environment, Nabors does not anticipate resuming activity in this market in the near term. Financial performance in the region had already been increasingly marginal.

Story Continues

NBR’s Segmental Performances

U.S. Drilling generated operating revenues of $230.7 million, down 15.2% from the year-ago quarter’s $272 million. However, the figure beat our model estimate of $221.6 million. Operating profit totaled $31.6 million compared with $50.5 million in the year-ago quarter. The figure also missed our estimated profit of $45 million.

International Drilling’s operational revenues of $381.7 million increased from $349.4 million a year ago. The unit’s top line also beat our estimate of $357.1 million. Operating profit totaled $33 million compared with the prior-year quarter’s $22.5 million. The figure also beat our estimated profit of $26.6 million.

Revenues from the Drilling Solutions segment totaled $93.2 million, up 23.3% from $75.6 million recorded in the prior-year quarter. The top line also beat our estimate of $78.7 million. Additionally, the unit’s operating income of $32.9 million increased from the year-ago quarter’s $26.9 million. The figure beat our estimate of $28 million.

Revenues from Rig Technologies totaled $44.2 million, down 11.9% from the prior-year quarter’s $50.2 million. The figure also missed our estimation of $47.6 million. The segment’s operating profit totaled $4.3 million compared with the prior-year quarter’s $4.2 million. The figure also surpassed our estimation of $3.5 million.

Financial Position of NBR

Nabors’ total costs and expenses decreased to $670.6 million from $736.9 million in the year-ago quarter. Additionally, the amount was down from our prediction of $711.4 million.

As of March 31, 2025, this Zacks Rank #2 (buy) company had $404.1 million in cash and short-term investments. Long-term debt was about $2.7 billion, with a total debt-to-total capital of 80.5%.

Capital expenditures totaled $159.2 million during the same time.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

NBR’s Guidance

U.S. Drilling: Nabors expects that in the second quarter of 2025, the Lower 48 average rig count will range from 63-64 rigs, with a daily adjusted gross margin of approximately $14,100. In Alaska and the Gulf of Mexico, the company expects a combined adjusted EBITDA of around $26 million.

International: The company expects an average international rig count of 85-86 rigs during the second quarter of 2025, including two rigs from Parker. The daily adjusted gross margin is expected to be approximately $17,700.

Drilling Solutions: NBR anticipates adjusted EBITDA of approximately $75 million in the second quarter of 2025, including an estimated $43 million contribution from Parker operations.

Rig Technologies: Nabors expects adjusted EBITDA for Rig Technologies in the second quarter of 2025 to be roughly in line with results from the first quarter.

Capital Expenditures: The company expects capital expenditures for the second quarter of 2025 to be between $220 million and $230 million, including $35 million for Parker operations and $100 million to $105 million for newbuilds in Saudi Arabia. For the full-year 2025, NBR anticipates capital expenditures of approximately $770-$780 million, with $360 million for SANAD newbuilds and $60 million for Parker.

Adjusted Free Cash Flow: Nabors expects adjusted free cash flow for the full-year 2025 to be approximately $80 million, excluding any impact from tariffs. SANAD is expected to consume about $150 million, while the remaining operations, including Parker, should generate around $230 million.

SANAD Joint Venture Outlook: The company expects SANAD Joint Venture's 2025 EBITDA to exceed $300 million, reflecting strong operational performance. It also anticipates adding five newbuilds annually, which is expected to support continued EBITDA growth in the coming years. Furthermore, NBR’s management has indicated that an IPO of SANAD is a serious strategic option currently under review.

Important Earnings at a Glance

While we have discussed NBR’s first-quarter results in detail, let us take a look at three other key reports in this space.

Oil and gas equipment and services provider, Liberty Energy LBRT, reported a first-quarter 2025 adjusted net income of 4 cents per share, which marginally beat the Zacks Consensus Estimate of 3 cents. Liberty's outperformance indicated operational efficiencies as well as increased utilization of frac and wireline fleets. However, the bottom line underperformed the year-ago quarter’s reported figure of 48 cents due to a decline in service activity.

As of March 31, Liberty had approximately $24.1 million in cash and cash equivalents. The pressure pumper’s long-term debt of $210 million represented a debt-to-capitalization of 9.6%.

Another oil and gas equipment and services provider, Halliburton Company HAL, posted first-quarter 2025 adjusted net income per share of 60 cents. The figure met with the Zacks Consensus Estimate but was down from the year-ago quarter’s profit of 76 cents (adjusted). The numbers reflect softer activity in the region of North America, partly offset by international growth. Meanwhile, Halliburton’s revenues of $5.4 billion decreased 6.7% year over year but beat the Zacks Consensus Estimate of $5.3 billion.

As of March 31, 2025, Halliburton had approximately $1.8 billion in cash/cash equivalents and $7.2 billion in long-term debt, representing a debt-to-capitalization ratio of 40.8.

Houston, TX-based oil and gas equipment and services provider, Baker Hughes BKR, reported first-quarter 2025 adjusted earnings of 51 cents per share, which beat the Zacks Consensus Estimate of 47 cents. The bottom line also improved from the year-ago level of 43 cents.

As of March 31, 2025, Baker had cash and cash equivalents of $3,277 million. Baker had a long-term debt of $5,969 million at the end of the reported quarter, with a debt-to-capitalization of 25.9%.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Halliburton Company (HAL):Free Stock Analysis Report

Nabors Industries Ltd. (NBR):Free Stock Analysis Report

Baker Hughes Company (BKR):Free Stock Analysis Report

Liberty Energy Inc. (LBRT):Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research

View Comments