Nabors (NBR) Down 4.1% Since Last Earnings Report: Can It Rebound?

A month has gone by since the last earnings report for Nabors Industries (NBR). Shares have lost about 4.1% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Nabors due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the latest earnings report in order to get a better handle on the important catalysts.

Nabors Q3 Loss Wider Than Expected, Revenues Increase Y/Y

Nabors Industries reported a third-quarter 2025 adjusted loss of $3.67 per share, wider than the Zacks Consensus Estimate of a loss of $2.37. This underperformance was mainly due to lower adjusted operating income from its U.S. Drilling and Rig Technologies segments. Additionally, the metric also widened from the prior-year quarter’s reported loss of $3.35 per share.

The oil and gas drilling company’s operating revenues of $818.2 million missed the Zacks Consensus Estimate of $842 million due to lower revenue contributions from the aforementioned segments. However, the figure increased from the year-ago quarter’s $731.8 million, driven by stronger revenue contributions from the International Drilling and Drilling Solutions segments.

On the other hand, adjusted EBITDA increased to $236.3 million from $221.7 million recorded a year ago. However, it fell short of our model estimate of $270.8 million.

Segmental Performances

U.S. Drilling generated operating revenues of $249.8 million, down 1.9% from the year-ago quarter’s $254.8 million. However, the figure topped our model estimate of $226.4 million.

Operating profit totaled $31.4 million compared with $41.7 million in the year-ago quarter. The figure also missed our estimated profit of $47.2 million.

International Drilling’s operational revenues of $407.2 million increased from $368.6 million a year ago. Moreover, the unit’s top line beat our estimate of $399.5 million.

Operating profit totaled $45.5 million compared with the prior-year quarter’s $32.2 million. Moreover, the figure beat our estimate of $38.1 million.

Revenues from the Drilling Solutions segment totaled $141.9 million, up 78.4% from $79.5 million recorded in the prior-year quarter.  However, the top line missed our estimate of $160.9 million.

Additionally, the unit’s operating income of $50 million increased from the year-ago quarter’s $29.2 million and came in line with our estimate.

Revenues from Rig Technologies totaled $35.6 million, down 22.3% from the prior-year quarter’s $45.8 million. Moreover, the figure missed our estimate of $53.7 million.

The segment’s operating profit totaled $0.9 million compared with the prior-year quarter’s $2.8 million. Moreover, the figure missed our estimate of $4.1 million.

Financial Position

Nabors’ total costs and expenses decreased to $405.5 million from $766.3 million in the year-ago quarter. Additionally, the amount was also lower than our prediction of $810.4 million.

As of Sept. 30, 2025, the company had $428.1 million in cash and short-term investments.

Long-term debt was about $2.3 billion, with a debt-to-capitalization of 80.2%. Capital expenditures totaled $202.3 million during the same time.

Q4 & 2025 Guidance

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 $13,000 in the fourth quarter of 2025. Additionally, the combined adjusted EBITDA for Alaska and the Gulf of America is projected to reach around $25 million in the quarter.

For its International operations, the company expects the average rig count to reach approximately 91 rigs, with a daily adjusted gross margin estimated at approximately $18,100-$18,200 during the period.

Turning to the company’s Drilling Solutions segment, NBR expects adjusted EBITDA to reach approximately $39 million. On the other hand, Rig Technologies’ adjusted EBITDA is anticipated to be around $5 million to $6 million.

In terms of capital expenditures, the company plans to allocate between $180 million and $190 million in the fourth quarter of 2025. Of this amount, approximately $90-$95 million will be dedicated to new builds in Saudi Arabia.

Finally, NBR expects its adjusted free cash flow for the fourth quarter of 2025 to be around $10 million. However, the company expects its full-year adjusted free cash flow to be breakeven, a considerable variance from its earlier full-year guidance of $80 million, due to Quail divestiture and outstanding collections from PEMEX related to 2024.  Nabors also forecasts a modest downside risk to its own current rig count through year-end and expects its daily revenues to remain in the low $30,000 range.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates review.

The consensus estimate has shifted -5.31% due to these changes.

VGM Scores

Currently, Nabors has a average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock has a score of A on the value side, putting it in the top 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Nabors has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.

Performance of an Industry Player

Nabors is part of the Zacks Oil and Gas - Drilling industry. Over the past month, Noble Corporation PLC (NE), a stock from the same industry, has gained 3.8%. The company reported its results for the quarter ended September 2025 more than a month ago.

Noble Corporation PLC reported revenues of $798.02 million in the last reported quarter, representing a year-over-year change of -0.3%. EPS of $0.19 for the same period compares with $0.58 a year ago.

Noble Corporation PLC is expected to post earnings of $0.18 per share for the current quarter, representing a year-over-year change of -67.9%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #5 (Strong Sell) for Noble Corporation PLC. Also, the stock has a VGM Score of A.

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

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