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Nabors Industries Ltd. NBR reported a second-quarter 2025 adjusted loss of $2.71 per share, wider than the Zacks Consensus Estimate of a loss of $2.05. This underperformance was mainly due to lower adjusted operating income from its U.S. Drilling and Rig Technologies segments, coupled with increased year-over-year costs, including direct costs, general and administrative expenses, interest expenses and other related expenditures. However, the loss narrowed from the prior-year quarter’s reported loss of $4.29 per share, primarily driven by year-over-year growth in adjusted operating income from the International Drilling and Drilling Solutions segments.
The oil and gas drilling company’s operating revenues of $832.8 million marginally beat the Zacks Consensus Estimate of $831 million, driven by stronger revenue contributions from the aforementioned segments. Moreover, the figure increased from the year-ago quarter’s $734.8 million.
On the other hand, adjusted EBITDA increased to $248.5 million from $218.1 million recorded a year ago. However, it fell short of our model estimate of $306.5 million.
Nabors Industries Ltd. price-consensus-eps-surprise-chart | Nabors Industries Ltd. Quote
U.S. Drilling generated operating revenues of $255.4 million, down 1.6% from the year-ago quarter’s $259.7 million. The figure also missed our model estimate of $312.7 million.
Operating profit totaled $39.8 million compared with $45.1 million in the year-ago quarter. The figure also missed our estimated profit of $64.6 million.
International Drilling’s operational revenues of $385 million increased from $356.7 million a year ago. However, the unit’s top line missed our estimate of $394.8 million.
Operating profit totaled $36.1 million compared with the prior-year quarter’s $23.7 million. However, the figure missed our estimate of $37.8 million.
Revenues from the Drilling Solutions segment totaled $170.3 million, up 105.3% from $83 million recorded in the prior-year quarter. Moreover, the top line beat our estimate of $91.1 million.
Additionally, the unit’s operating income of $50.4 million increased from the year-ago quarter’s $27.3 million. However, the figure missed our estimate of $65.2 million.
Revenues from Rig Technologies totaled $36.5 million, down 26.3% from the prior-year quarter’s $49.5 million. Moreover, the figure missed our estimate of $41.5 million.
The segment’s operating profit totaled $1.7 million compared with the prior-year quarter’s $4.9 million. Moreover, the figure missed our estimate of $4.1 million.
Nabors’ total costs and expenses increased to $818 million from $740.5 million in the year-ago quarter. Additionally, the amount was slightly higher than our prediction of $816.1 million.
As of June 30, 2025, this Zacks Rank #5 (Strong Sell) company had $387.4 million in cash and short-term investments.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Long-term debt was about $2.7 billion, with a total debt-to-total capital of 80.7%. Capital expenditures totaled $141.8 million during the same time.
NBR anticipates that its U.S. Drilling operations will see a lower 48 average rig count ranging between 57 and 59 rigs, accompanied by a daily adjusted gross margin of approximately $13,300 in the third quarter of 2025. Additionally, the combined adjusted EBITDA for Alaska and the Gulf of America is projected to reach around $26 million in the quarter.
For its International operations, the company expects an average rig count between 87 and 88 rigs, with a daily adjusted gross margin estimated at approximately $17,900 during the period.
Turning to the company’s Drilling Solutions segment, NBR expects adjusted EBITDA to remain in line with the second-quarter level. On the other hand, Rig Technologies’ adjusted EBITDA is anticipated to increase around $2 million to $3 million.
In terms of capital expenditures, the company plans to allocate between $200 million and $210 million in the third quarter of 2025. Of this amount, approximately $110-$115 million will be dedicated to newbuilds in Saudi Arabia, bringing total expected capital expenditures for the year to a range of $700-$710 million. This includes $300 million earmarked for SANAD newbuilds and $60 million for Parker Wellbore.
Finally, NBR expects its adjusted free cash flow for the third quarter of 2025 to be consistent with the second quarter, as it works toward achieving its full-year target of $80 million in adjusted free cash flow. The company also forecasts stabilizing its Lower 48 rig count through the end of the year, with continued weakness in oil-focused activity likely offset by increased natural gas drilling. As a result, it expects leading-edge daily revenues to remain resilient in the low $30,000 range, which should help support its daily gross margin.
While we have discussed NBR’s second-quarter results in detail, let us take a look at three other key reports in this space.
San Antonio, TX-based oil and gas refining and marketing service provider, Valero Energy Corporation VLO, reported second-quarter 2025 adjusted earnings of $2.28 per share, which beat the Zacks Consensus Estimate of $1.73. However, the bottom line declined from the year-ago quarter’s level of $2.71. The better-than-expected quarterly results can be attributed to an increase in refining margins per barrel of throughput and lower total cost of sales. The positives were partially offset by a decline in refining throughput volumes and renewable diesel sales volumes.
The company had cash and cash equivalents of $4.5 billion at the end of the second quarter. As of June 30, 2025, it had a total debt of $8.4 billion and finance-lease obligations of $2.3 billion.
Houston, TX-based oil and gas equipment and services provider, Halliburton Company HAL, reported second-quarter 2025 adjusted net income of 55 cents per share, which was in line with the Zacks Consensus Estimate but below the year-ago quarter’s profit of 80 cents (adjusted). The numbers reflect softer activity in the North American region, partly offset by international growth.
As of June 30, 2025, the company had approximately $2 billion in cash/cash equivalents and $7.2 billion in long-term debt, representing a debt-to-capitalization ratio of 40.4. Halliburton reported second-quarter capital expenditure of $354 million, up from our projection of $338.2 million.
Norway-based integrated oil and gas operator, Equinor ASA EQNR, reported second-quarter 2025 adjusted earnings per share of 64 cents, which missed the Zacks Consensus Estimate of 66 cents. The bottom line declined 25% from the year-ago quarter’s level of 84 cents. Weak quarterly results can be attributed to lower liquids production across major segments and reduced liquids prices. Natural declines and portfolio divestments in Nigeria and Azerbaijan also contributed to the decrease in overall production.
As of June 30, 2025, the company reported $9,472 million in cash and cash equivalents. Its long-term debt was $24,505 million. During the same time, Equinor generated a negative net cash flow of $2,579 million compared with $4,022 million in the year-ago period. Equinor’s capital expenditures amounted to $3.4 billion in the second quarter.
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This article originally published on Zacks Investment Research (zacks.com).
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