Nabors Industries reports Q2 EPS (31c) vs. ($9.41) last year

Reports Q2 revenue $778.8M vs . $631.8M last year. William Restrepo, Nabors CFO, stated, “Our results in the second quarter mirrored the performance of our markets. Our International segment was solid, while our technology businesses also delivered sequential growth. These results helped offset the softening rig markets we had forecast in the Lower 48 and Colombia. We expected lower drilling activity in gas basins but admittedly, the reductions in oil related drilling we experienced were not anticipated. Despite that pause in the Lower 48, our operation in that market continued to generate superior economics, with record margins and substantial cash flow generation. Free cash flow in the quarter, although still positive, was impacted by somewhat lower than expected adjusted EBITDA, and higher than planned capital spending. Capex for the newbuild rigs in Saudi Arabia accounted for this variance, as our supplier reached progress milestones earlier than we planned. It is worth highlighting that while our SANAD JV consumed cash during the quarter, free cash flow for the remainder of our business reached almost $60 million. This incremental cash flow supported the redemption in June of approximately $52 million of notes due in September of 2023. At the same time, our revolving credit facility remained undrawn at the end of the second quarter. The drilling market should continue to weaken in the Lower 48 during the third quarter. But after a tough first half in the U.S., we are now starting to see signs that this market is bottoming in the third quarter with encouraging data points of incremental activity for the fourth quarter. On another positive note, we anticipate further strength in International markets, with early signs of growth developing into awards for incremental rigs. Drilling Solutions and Rig Technologies are also expected to increase sequentially.”