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Investing.com -- Shares of ADNOC Drilling (ADX:ADNOCDRILL) tumbled by 4% today, despite the company reporting a strong fourth quarter that surpassed analyst expectations.
The reported net profit for the fourth quarter of 2024 stood at $399 million, a 21% beat compared to the Visible Alpha consensus of $329 million. The company’s net debt was reported at $1,990 million, closely aligned with the consensus of $1,996 million.
Despite the positive performance in the fourth quarter, ADNOC Drilling’s stock experienced a decline. The company also provided guidance for fiscal year 2025, reaffirming growth expectations. The anticipated group revenue is projected to be between $4,600 million and $4,800 million, marking a midpoint increase of 17% year-on-year (YoY) and 5% above the consensus of $4,485 million.
Expected group EBITDA is forecasted to be in the range of $2,150 million to $2,300 million, which would represent a 10% YoY increase and 6% above the consensus of $2,098 million, with margins expected to be between 46% and 48%. The group’s net income is projected to be between $1,350 million and $1,450 million, which would be a 7% YoY increase and 3% above the consensus of $1,358 million, with net income margins anticipated to be between 28% and 30%.
Capital expenditures, including maintenance and expenditures for island rigs, are expected to be between $350 million and $550 million, which is a 21% decrease compared to the consensus of $573 million. The company also aims to maintain a net debt to EBITDA ratio of less than 2.0x.
Analysts have responded positively to the results and guidance. Jefferies commented, "A strong set of results, with the majority of performance metrics for FY24 beating guidance and consensus. We believe FY25 operational guidance is encouraging, with revenue, EBITDA and net income all higher vs VA consensus, and margins in-line, with FY26 revenue visibility of c.$5bn, also higher than the street."
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