Core Insights - The performance of DNOW's international operations is crucial for assessing its financial resilience and growth prospects [1][4] - Understanding a company's reliance on international markets is essential for evaluating its earnings sustainability and growth potential [2] Revenue Performance - DNOW reported total revenue of $633 million for the quarter, reflecting a year-over-year increase of 6.6% [4] - Canada contributed $56 million, accounting for 8.9% of total revenue, which was below the consensus estimate of $58.2 million [5] - International revenue was $65 million, representing 10.3% of total revenue, also falling short of the expected $70.3 million [6] Future Projections - Analysts project DNOW's total revenue for the current fiscal quarter to be $606.9 million, a 3.2% increase from the same quarter last year [7] - For the full year, total revenue is expected to reach $2.36 billion, indicating a 1.5% rise from the previous year [8] Market Dependency - DNOW's dependency on global markets presents both opportunities and challenges, making the monitoring of international revenue trends vital for predicting future performance [9][10]

LOS ANGELES, Aug. 12, 2024 /PRNewswire/ -- The Schall Law Firm, a national shareholder rights litigation firm, announces that it is investigating claims on behalf of investors of ServiceNow, Inc. ("ServiceNow" or "the Company") (NYSE: NOW) for violations of the securities laws. The investigation focuses on whether the Company issued false and/or misleading statements and/or failed to disclose information pertinent to investors. ServiceNow suffered a downgrade from "Neutral" to "Sell" issued by Guggenheim on ...

DNOW Inc. (NYSE:DNOW) Q2 2024 Earnings Conference Call August 7, 2024 9:00 AM ET Company Participants Brad Wise - Vice President, Digital Strategy and IR David Cherechinsky - President and CEO Mark Johnson - SVP and CFO Conference Call Participants Nathan Jones - Stifel Jeff Robertson - Water Tower Research Operator Good morning. My name is Rob, and I will be your conference operator today. At this time, I would like to welcome everyone to the DNOW Second Quarter 2024 Earnings Conference Call. [Operator Ins ...

Part I [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) DNOW Inc.'s H1 2024 unaudited financials show total assets at $1.56 billion, revenue at $1.20 billion, and net income at $46 million, with cash flow impacted by acquisitions [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) The balance sheet shows total assets increased to $1.56 billion, primarily due to goodwill and intangibles from the Whitco Supply acquisition Consolidated Balance Sheet Highlights (in millions) | Account | June 30, 2024 (Unaudited) | December 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $197 | $299 | | Inventories, net | $399 | $366 | | Goodwill | $192 | $139 | | Total assets | $1,563 | $1,529 | | Total liabilities | $464 | $466 | | Total stockholders' equity | $1,099 | $1,063 | - The increase in **Goodwill from $139 million to $192 million** and **Intangibles from $28 million to $57 million** is primarily due to the acquisition of Whitco Supply, LLC during the first half of 2024[3](index=3&type=chunk)[35](index=35&type=chunk) [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) The statements of operations show revenue growth for Q2 and H1 2024, but net income declined significantly compared to the prior year Statement of Operations Summary (in millions) | Metric | Q2 2024 | Q2 2023 | H1 2024 | H1 2023 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $633 | $594 | $1,196 | $1,178 | | Operating Profit | $33 | $36 | $61 | $71 | | Net Income Attributable to DNOW Inc. | $24 | $34 | $45 | $65 | - Revenue increased by **6.6% YoY for Q2 2024** and **1.5% for H1 2024**, however, net income declined by **29.4% for Q2 2024** and **30.8% for H1 2024** compared to the same periods in 2023[4](index=4&type=chunk)[50](index=50&type=chunk) [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Cash flow from operations increased, but significant cash was used in investing activities for acquisitions, leading to a net decrease in cash Cash Flow Summary for Six Months Ended June 30 (in millions) | Cash Flow Activity | 2024 | 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $102 | $79 | | Net cash used in investing activities | ($188) | ($43) | | Net cash used in financing activities | ($15) | ($47) | | Net change in cash and cash equivalents | ($102) | ($9) | - The significant use of cash in investing activities in H1 2024 was driven by a **$185 million payment for a business acquisition**, a substantial increase from the **$33 million** used for acquisitions in H1 2023[6](index=6&type=chunk) - Cash used in financing activities decreased primarily due to lower share repurchases, which amounted to **$11 million in H1 2024** compared to **$44 million in H1 2023**[6](index=6&type=chunk) [Notes to Unaudited Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) Notes detail business segments, the $185 million Whitco Supply acquisition boosting U.S. revenue, and $11 million in share repurchases Revenue by Business Segment (in millions) | Segment | Q2 2024 | Q2 2023 | H1 2024 | H1 2023 | | :--- | :--- | :--- | :--- | :--- | | United States | $512 | $456 | $947 | $883 | | Canada | $56 | $66 | $122 | $149 | | International | $65 | $72 | $127 | $146 | | **Total** | **$633** | **$594** | **$1,196** | **$1,178** | Operating Profit by Business Segment (in millions) | Segment | Q2 2024 | Q2 2023 | H1 2024 | H1 2023 | | :--- | :--- | :--- | :--- | :--- | | United States | $28 | $29 | $51 | $52 | | Canada | $2 | $3 | $5 | $11 | | International | $3 | $4 | $5 | $8 | | **Total** | **$33** | **$36** | **$61** | **$71** | - In H1 2024, the company acquired Whitco Supply, LLC for **$185 million**, resulting in the recognition of **$53 million in goodwill** and **$30 million in intangible assets** in the U.S. segment[35](index=35&type=chunk)[36](index=36&type=chunk) - Under its share repurchase program, the company bought back **837,518 shares for $11 million in H1 2024**, compared to **4,026,550 shares for $44 million in H1 2023**[23](index=23&type=chunk)[24](index=24&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=20&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) MD&A attributes Q2 2024 revenue growth to the Whitco Supply acquisition, offsetting declines elsewhere, with operating profit falling; liquidity remains strong [Operating Environment Overview](index=23&type=section&id=Operating%20Environment%20Overview) The operating environment shows a mixed trend with declining U.S. rig counts but increasing WTI crude oil prices Key Industry Indicators (Q2 2024 vs. Q2 2023) | Indicator | Q2 2024 | Q2 2023 | % Change | | :--- | :--- | :--- | :--- | | U.S. Active Drilling Rigs | 603 | 722 | (16.5%) | | Canada Active Drilling Rigs | 137 | 115 | 19.1% | | International Active Drilling Rigs | 963 | 960 | 0.3% | | WTI Crude Price ($/barrel) | $81.71 | $73.76 | 10.8% | | U.S. Wells Completed | 2,756 | 3,185 | (13.5%) | - Despite a **16.5% YoY decline** in the U.S. rig count, the average price of WTI crude oil increased by **10.8%** in Q2 2024 compared to Q2 2023, indicating a mixed operating environment[44](index=44&type=chunk) [Results of Operations](index=25&type=section&id=Results%20of%20Operations) U.S. segment revenue grew due to acquisition, offsetting declines in Canada and International segments, while the effective tax rate significantly increased - U.S. segment revenue increased **12.3% in Q2 2024** and **7.2% in H1 2024**, primarily driven by the Whitco Supply acquisition, which offset weakening drilling and completion activity[53](index=53&type=chunk) - Canada segment revenue declined **15.2% in Q2 2024** and **18.1% in H1 2024** due to weaker project activity and unfavorable foreign exchange rates[55](index=55&type=chunk) - International segment revenue decreased **9.7% in Q2 2024** and **13.0% in H1 2024**, also driven by weaker project activity[56](index=56&type=chunk) - The effective tax rate for H1 2024 was **25.8%**, significantly higher than **5.7%** in H1 2023, with the prior year's rate lower due to a non-recurring release of a valuation allowance on deferred tax assets[59](index=59&type=chunk)[28](index=28&type=chunk) Reconciliation to EBITDA excluding other costs (in millions) | Metric | Q2 2024 | Q2 2023 | H1 2024 | H1 2023 | | :--- | :--- | :--- | :--- | :--- | | Net income attributable to DNOW Inc. | $24 | $34 | $45 | $65 | | Adjustments (Taxes, D&A, etc.) | $21 | $11 | $36 | $22 | | Other costs | $9 | $6 | $14 | $13 | | **EBITDA excluding other costs** | **$50** | **$47** | **$89** | **$94** | [Liquidity and Capital Resources](index=28&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity with $197 million in cash and $485 million available under its credit facility, alongside $11 million in share repurchases - As of June 30, 2024, the company had **$197 million** in cash and cash equivalents and no borrowings against its **$500 million** revolving credit facility[64](index=64&type=chunk) - Total availability under the credit facility was approximately **$485 million** as of June 30, 2024[64](index=64&type=chunk)[22](index=22&type=chunk) - The company repurchased **$11 million** of its common stock in H1 2024 and had approximately **$13 million** remaining under its share repurchase authorization as of June 30, 2024[70](index=70&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=31&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risks are foreign currency and commodity steel prices, with a hypothetical 10% currency change having an immaterial impact on net income - The company's primary market risks are foreign currency exchange rate fluctuations and changes in commodity steel prices[73](index=73&type=chunk)[75](index=75&type=chunk) - Approximately **one-fifth** of revenue for H1 2024 was generated outside the U.S., with primary currency exposures to the Canadian dollar and British pound[74](index=74&type=chunk) - A sensitivity analysis indicates that a hypothetical **10%** adverse change in foreign currency exchange rates would have resulted in **less than a $1 million** change in net income for the first six months of 2024[74](index=74&type=chunk) [Controls and Procedures](index=33&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded the company's disclosure controls and procedures were effective as of June 30, 2024, with no material changes to internal controls - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report[76](index=76&type=chunk) - There were no changes in internal control over financial reporting during the last fiscal quarter that materially affected, or are reasonably likely to materially affect, these controls[77](index=77&type=chunk) Part II [Unregistered Sales of Equity Securities and Use of Proceeds](index=33&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) In Q2 2024, the company repurchased 669,463 shares for $10 million, with $13 million remaining under the authorization expiring December 31, 2024 Share Repurchases for Q2 2024 | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | April 2024 | — | $— | | May 2024 | 141,256 | $14.18 | | June 2024 | 528,207 | $13.50 | | **Total** | **669,463** | **$13.64** | - The share repurchase program, authorizing up to **$80 million** in purchases, is set to expire on **December 31, 2024**[78](index=78&type=chunk) [Other Information](index=34&type=section&id=Item%205.%20Other%20Information) No director or officer adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q2 2024 - During the three months ended June 30, 2024, no director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement[79](index=79&type=chunk) [Exhibits](index=34&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including corporate governance documents, credit agreements, and SOX certifications - The report includes various exhibits such as the Amended and Restated Certificate of Incorporation, credit agreements, the 2024 Omnibus Incentive Plan, and Sarbanes-Oxley certifications[79](index=79&type=chunk)

DNOW (DNOW) came out with quarterly earnings of $0.25 per share, missing the Zacks Consensus Estimate of $0.26 per share. This compares to earnings of $0.25 per share a year ago. These figures are adjusted for nonrecurring items. This quarterly report represents an earnings surprise of -3.85%. A quarter ago, it was expected that this energy and industrial distribution company would post earnings of $0.24 per share when it actually produced earnings of $0.21, delivering a surprise of -12.50%. Over the last f ...

Exhibit 99.1 DNOW Reports Second Quarter 2024 Results Earnings Conference Call August 7, 2024 8:00 a.m. CT 1 (888) 660-6431 (within North America) 1 (929) 203-2118 (outside of North America) Access Code: 7372055 Webcast: ir.dnow.com HOUSTON, TX, August 7, 2024 – DNOW Inc. (NYSE: DNOW) announced results for the second quarter ended June 30, 2024. Second Quarter 2024 Highlights • Revenue was $633 million for the second quarter of 2024 • Net income attributable to DNOW Inc. was $24 million, or $0.21 per dilute ...

Investors might want to bet on DNOW (DNOW) , as it has been recently upgraded to a Zacks Rank #1 (Strong Buy). This upgrade primarily reflects an upward trend in earnings estimates, which is one of the most powerful forces impacting stock prices. The sole determinant of the Zacks rating is a company's changing earnings picture. The Zacks Consensus Estimate -- the consensus of EPS estimates from the sell-side analysts covering the stock -- for the current and following years is tracked by the system. Since a ...

baona The Thesis DNOW Inc. (NYSE:DNOW) continued to see double digit decline primarily in its Canada segment as it entered 2024 mainly due to unfavorable weather events during the quarter. However, the delayed project due to weather impact are anticipated to be done in coming quarters of 2024 which should drive the regions sales in going ahead. The activity in the U.S. segment also remains healthy, which along with benefits from addition of Whitco should drive the company's topline in 2024. The longer term ...

Core Insights - The performance of DNOW's international operations is crucial for assessing its financial resilience and growth prospects in the current interconnected global economy [1][2] Group 1: International Revenue Performance - DNOW's total revenue for the quarter was $563 million, reflecting a year-over-year decline of 3.6% [4] - Revenue from Canada was $66 million, accounting for 11.7% of total revenue, which was a surprise decline of 6.91% compared to analyst expectations [5] - International revenue contributed $62 million, making up 11.0% of total revenue, which was a surprise decline of 20.72% from the consensus estimate [6] Group 2: Future Revenue Projections - Analysts expect DNOW to report $638 million in total revenue for the current fiscal quarter, indicating a 7.4% increase from the year-ago quarter [7] - For the full year, total revenue is projected to reach $2.48 billion, representing a rise of 6.9% from the previous year, with Canada and International expected to contribute 11.3% ($279.6 million) and 12.5% ($310 million) respectively [8] Group 3: Market Context and Stock Performance - The reliance on international markets presents both opportunities and challenges for DNOW, making it essential to monitor international revenue movements for future projections [9] - Over the past four weeks, DNOW's stock value has decreased by 8%, while the S&P 500 composite increased by 2.5% [13] - In the last three months, DNOW's shares increased by 8.3%, outperforming the S&P 500's 5.3% increase [13]

Financial Data and Key Metrics Changes - Total revenue for Q1 2024 was $563 million, an increase of 1% or $8 million from Q4 2023 [38] - EBITDA excluding other costs for Q1 was $39 million, representing 6.9% of revenue [38] - Free cash flow generated in Q1 was $80 million, contributing to a total of $262 million over the last four quarters, the best trailing four-quarter period since 2016 [27][41] - Gross margins for Q1 were 22.9%, down 20 basis points from the 2023 average, primarily due to inventory step-up amortization charges related to the acquisition [15] Business Line Data and Key Metrics Changes - U.S. revenue for Q1 2024 totaled $435 million, up $17 million or 4% sequentially, driven by the acquisition of Whitco Supply [7][38] - Canadian revenue was $66 million, an increase of $1 million or 2% from Q4 2023 [15] - International revenue was $62 million, down $10 million or 14% sequentially, primarily due to non-repeating projects [9][15] Market Data and Key Metrics Changes - U.S. rig count was flat quarter-over-quarter, while U.S. completions declined 11% sequentially and 15% year-over-year [7] - Demand for FlexFlow horizontal pump products remained steady, with increased demand for EcoVapor products as operators sought solutions for emissions reduction [8][10] Company Strategy and Development Direction - The company aims to leverage its solid position in upstream and midstream markets, achieve leadership in energy evolution, and expand its presence in adjacent industrial markets [20][28] - The acquisition of Whitco Supply is seen as a strategic move to enhance service levels and capabilities, particularly in the midstream energy sector [5][28] - The company is focused on driving revenue synergies from the Whitco acquisition, targeting new customer bases and expanding product offerings [68] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the prospects for the remainder of 2024, expecting sequential growth in U.S. and international markets [42] - The full-year revenue outlook has been upgraded, with expectations for mid-to-high single-digit growth compared to 2023 [43] - Management highlighted the importance of adapting to changing market conditions and maintaining a disciplined approach to balance sheet management [29] Other Important Information - The company ended the quarter with a cash position of $188 million and zero debt, with total liquidity of $564 million [40] - The effective tax rate for Q1 was 27.6%, with expectations for the full year to be approximately 27% to 28% [16] Q&A Session Summary Question: What are the revenue synergy potentials from the Whitco acquisition? - Management indicated that the focus will be on revenue synergies, particularly leveraging Whitco's midstream customer base which overlaps minimally with DNOW's existing customers [68] Question: What contributed to the strong free cash flow in Q1? - Approximately half of the cash flow was attributed to earnings, while the other half came from improved organic accounts receivable, with a notable decrease in days sales outstanding [45] Question: How does the addition of Whitco affect future acquisitions? - Management stated that while Whitco is a unique acquisition, future investments will likely focus on process solutions, maintaining a strategy of targeted acquisitions [82]