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Investing.com -- Nabors Industries Ltd. (NYSE:NBR) reported third-quarter earnings that beat analyst expectations, driving shares up 6% in after-hours trading on Tuesday. The drilling contractor posted breakeven earnings per share, significantly outperforming the analyst estimate of a $1.65 per share loss.
Revenue for the quarter came in at $825.51 million, slightly above the consensus estimate of $825.48 million but down from $833 million in the second quarter. The company’s adjusted EBITDA was $236 million, compared to $248 million in the previous quarter. The quarter included a one-time, after-tax gain of $314 million from the sale of Quail Tools.
"The sale of Quail Tools is a transformative event for Nabors," said Anthony G. Petrello, Nabors Chairman, CEO and President. "We have already used a portion of the proceeds to reduce our gross debt by approximately $330 million. The balance of the proceeds is targeted for additional debt reduction."
The company’s International Drilling segment showed strong performance with adjusted EBITDA of $127.6 million, up from $117.7 million in the second quarter. Average rig count increased by more than three rigs, while daily adjusted gross margin improved to $17,931. U.S. Drilling segment reported adjusted EBITDA of $94.2 million, down from $101.8 million in the previous quarter.
For the fourth quarter, Nabors expects its Lower 48 average rig count to be 57-59 rigs with daily adjusted gross margin of approximately $13,000. The company anticipates International average rig count of approximately 91 rigs with daily adjusted gross margin of $18,100-$18,200.
The company has already utilized proceeds from the Quail Tools sale to fully repay outstanding borrowings under its revolving credit facility and to redeem $150 million of notes due in 2027, significantly strengthening its leverage metrics.
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