Financial Performance - Nabors reported third quarter 2025 operating revenues of $818 million, a decrease from $833 million in the second quarter[2] - Net income attributable to shareholders was $274 million, compared to a net loss of $31 million in the previous quarter, resulting in earnings per diluted share of $16.85[2] - Adjusted EBITDA for the third quarter was $236 million, down from $248 million in the previous quarter[2] - Operating revenues for Q3 2025 reached $818,190, an increase of 11.8% compared to $731,805 in Q3 2024[30] - Net income attributable to Nabors for Q3 2025 was $274,198, a significant recovery from a net loss of $55,825 in Q3 2024[30] - Adjusted EBITDA for the nine months ended September 30, 2025, was $691,112, up from $660,790 for the same period in 2024, reflecting a growth of 4.5%[30] - For the three months ended September 30, 2025, the net income was $302,466, compared to a net loss of $33,087 for the same period in 2024[44] - The total adjusted EBITDA for the three months ended September 30, 2025, was $236,308, compared to $221,720 for the same period in 2024, reflecting an increase of approximately 6.5%[45] - The total adjusted operating income (loss) for the nine months ended September 30, 2025, was $201,066, compared to $183,730 for the same period in 2024, indicating a year-over-year improvement[45] Debt and Cash Flow - The sale of Quail Tools generated $625 million, with $375 million received in cash at closing, significantly reducing gross debt by approximately $330 million[4] - Adjusted free cash flow for the third quarter was $6 million, down from $41 million in the prior quarter, impacted by lower collections in Mexico[13] - Nabors expects fourth quarter 2025 adjusted free cash flow to be approximately $10 million[21] - The company reported a net debt of $1,919,905 as of September 30, 2025, down from $2,285,465 as of June 30, 2025[52] - Free cash flow for the three months ended September 30, 2025, was $5,613, compared to $9,961 in the previous quarter[54] - Adjusted free cash flow for the three months ended September 30, 2025, was $5,613, significantly lower than $40,596 in the previous quarter[54] Segment Performance - International Drilling adjusted EBITDA increased to $127.6 million, up from $117.7 million in the second quarter, driven by a higher average rig count[9] - U.S. Drilling segment adjusted EBITDA decreased to $94.2 million from $101.8 million, attributed to lower rig count and daily margin in the Lower 48[10] - U.S. Drilling segment revenues for Q3 2025 were $249,836, a slight decrease from $254,773 in Q3 2024[34] - International Drilling segment revenues increased to $407,235 in Q3 2025, up from $368,594 in Q3 2024, representing a growth of 10.4%[34] - Adjusted operating income for the U.S. Drilling segment was $31,429, while the International Drilling segment reported $45,476 for the same period[45] - The adjusted operating income (loss) for the Rig Technologies segment was $49,982 for the three months ended September 30, 2025, highlighting its contribution to overall performance[45] Operational Metrics - The company anticipates a Lower 48 average rig count of 57-59 rigs and a daily adjusted gross margin of approximately $13,000 for the fourth quarter[17] - Average rigs working in U.S. Drilling decreased to 69.2 in Q3 2025 from 74.0 in Q3 2024[34] - Daily Rig Revenue for U.S. Drilling was $39,219 in Q3 2025, compared to $37,441 in Q3 2024, indicating a growth of 4.7%[34] - The adjusted gross margin for U.S. Drilling for the three months ended September 30, 2025, was $100,680, a decrease from $115,071 in the previous quarter[46] - The adjusted gross margin for International Drilling for the three months ended September 30, 2025, was $147,231, an increase from $133,192 in the previous quarter[46] Integration and Synergies - The integration of Parker Wellbore businesses is progressing, with adjusted EBITDA contribution increasing by over 70% sequentially, aiming for $40 million in synergies by 2025[4]

Core Insights - Nabors Industries reported third quarter 2025 operating revenues of $818 million, a decrease from $833 million in the previous quarter. However, net income attributable to shareholders was $274 million, a significant recovery from a net loss of $31 million in the second quarter. This resulted in earnings per diluted share of $16.85, compared to a loss of $2.71 in the prior quarter. The quarter included a one-time after-tax gain of $314 million from the sale of Quail Tools, equating to $20.52 per diluted share [1][2][3]. Financial Performance - The third quarter adjusted EBITDA was $236 million, down from $248 million in the previous quarter [1][2]. - The sale of Quail Tools was highlighted as a transformative event, with $330 million used to reduce gross debt, expected to decrease by over 20% compared to June 30, 2025, leading to an annual interest expense reduction of approximately $45 million [3][14]. - Consolidated adjusted free cash flow for the third quarter was $6 million, down from $41 million in the prior quarter, impacted by lower collections in Mexico and reduced cash flow from the Quail Tools operation [11][13]. Segment Performance - International Drilling adjusted EBITDA increased to $127.6 million from $117.7 million in the previous quarter, driven by an increase in average rig count and improved daily margins [7][8]. - The U.S. Drilling segment reported adjusted EBITDA of $94.2 million, a decrease from $101.8 million, attributed to moderating industry demand [8][9]. - Drilling Solutions adjusted EBITDA was $60.7 million, down from $76.5 million, with a notable contribution from Quail Tools in the second quarter [9][10]. Operational Highlights - The company successfully deployed additional rigs in the Eastern Hemisphere, including 13 new builds in Saudi Arabia, with daily drilling margins approaching $18,000 [5][6]. - The integration of Parker Wellbore businesses has shown a sequential increase in adjusted EBITDA contribution by over 70%, with further cost synergies expected [16][20]. Outlook - For the fourth quarter of 2025, Nabors anticipates a Lower 48 average rig count of 57-59 rigs and a daily adjusted gross margin of approximately $13,000 [17][20]. - Adjusted free cash flow is projected to be around $10 million, with capital expenditures estimated at $180-190 million [20].

Core Insights - Nabors Industries Ltd. (NBR) is expected to report third-quarter 2025 earnings on October 28, with revenue estimates at $840.54 million and a projected loss of $2.37 per share [1][8] Financial Performance - In the last reported quarter, NBR's loss per share was $2.71, exceeding consensus estimates of a loss of $2.05, primarily due to lower adjusted operating income and increased costs [2] - Operating revenues for the last quarter were $832.8 million, slightly above the Zacks Consensus Estimate of $831 million, driven by stronger contributions from U.S. Drilling and Rig Technologies segments [2] Earnings Surprise History - NBR has missed the Zacks Consensus Estimate in each of the last four quarters, with an average negative surprise of 142.13% [3] - The consensus estimate for third-quarter 2025 earnings has seen a downward revision recently, indicating a year-over-year bottom-line increase of 29.25% and a revenue increase of 14.86% from the previous year [3] Revenue Drivers - NBR's revenues are influenced by demand for oil and gas services, which is affected by oil and gas prices, exploration and production activity, competition, and economic conditions [4] - The anticipated revenue for the upcoming quarter is $840.54 million, up from $743.3 million in the same quarter last year, attributed to higher contributions from International Drilling and Drilling Solutions and Rig Technologies segments [5] Cost Considerations - Direct costs are expected to rise to $466.3 million in the third quarter, an increase of $34.6 million from the previous year, while general and administrative expenses are projected to reach $74.4 million [7] - Interest expenses are also expected to increase from $159.2 million to $176.7 million during the same period [7] Earnings Prediction - The model predicts an earnings beat for NBR, supported by a positive Earnings ESP of +2.32% and a Zacks Rank of 3 (Hold) [9][10]

Market Overview - The market recovery that began in early April continued throughout the third quarter, with small and micro-cap value stocks posting their strongest quarterly returns since Q4 2023 [2] - Small caps resumed upward momentum after a four-year pause, reaching new highs and breaking the price level peak of 2021, indicating the early stages of a multi-year outperformance cycle for low valuation equities and smaller market caps [2] Technology Sector Insights - The Technology sector's weighting in the S&P 500 increased to 34.8%, significantly above its earnings contribution, indicating crowded ownership and market valuation expansion [3][6] - The Technology sector is nearing its all-time high weighting of 34.9% from March 2000, with forward price-to-earnings multiples above 30x, compared to the 20-year historical average of 18.3x [6][7] - The price-to-sales multiple for the Technology sector is approaching 10x revenue, with the "Magnificent 7" companies nearing 13x, highlighting elevated valuations [8] Valuation Discrepancies - There are significant valuation spreads between low valuation equities and longer duration/technology equities, with Deep Value Select strategy's valuation multiples at over a 70% discount to the S&P 500 Index [10][12] - The small cap sector is emerging from a multi-year earnings recession, with expected earnings growth in 2026 anticipated to outpace larger companies [12] Performance of Deep Value Strategy - The Deep Value Select strategy achieved a quarterly return of +26.50%, outperforming the S&P 1500 Value Index and S&P 600 Value Index [14] - Year-to-date, the Deep Value Select strategy net returns are +9.20%, slightly behind the S&P 1500 Value Index [14] - Ten of the twelve holdings in the strategy delivered positive double-digit returns, with Nabors Industries being the largest contributor, up 46% [16] Company-Specific Highlights - Nabors Industries is undergoing a multi-year transformation focused on technology, with over 450 patents and a strong balance sheet following the sale of its Quail Tools business for $600 million [16][19] - Bread Financial, despite a 2% decline in market share price, has improved its capital ratios and reduced debt significantly, positioning itself for long-term financial targets [20]

Core Insights - Nabors Industries Ltd. (NYSE:NBR) experienced a significant share price decline of 13.53% from October 3 to October 10, 2025, making it one of the worst-performing energy stocks during that week [1][2]. Group 1: Market Performance - The decline in Nabors Industries' stock price was attributed to escalating trade tensions between China and the United States, which also contributed to a drop in crude oil prices, with WTI oil falling below $60 per barrel for the first time since May [3]. - Nabors Industries was identified as one of the energy stocks that suffered heavily due to these market conditions [3]. Group 2: Financial Developments - On a positive note, Nabors Industries announced the receipt of full prepayment of a $250 million seller financing note from Superior Energy Services, related to the sale of Quail Tools LLC in August 2025 [4]. - The proceeds from this prepayment will be utilized for debt reduction, specifically targeting outstanding notes that are set to mature in 2028 [4].

Nabors Industries (NYSE: NBR) is a leading provider of advanced technology for the energy industry. With presence in more than 20 countries, Nabors has established a global network of people, technology and equipment to deploy solutions that deliver safe, efficient and responsible energy production. By leveraging its core competencies, particularly in drilling, engineering, automation, data science and manufacturing, Nabors aims to innovate the future of energy and enable the transition to a lower-carbon wo ...

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in NBR, NBRWF over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. My ...

Core Insights - Nabors Industries Ltd. (NBR) is one of the largest land-drilling contractors globally, focusing on oil, gas, and geothermal drilling operations. The company's shares have increased by approximately 11.4% recently, raising questions about the sustainability of this positive trend [1][2]. Price Performance & Estimates - In the past month, Nabors Industries' shares outperformed the Oil & Gas Drilling sub-industry, which gained 4%, and the broader oil and energy sector, which rose by 3.2%. Comparatively, peers like Patterson-UTI Energy, Inc. saw a decline of 1.9%, while Transocean Ltd. and Precision Drilling Corporation had gains of 9.8% and 2.3%, respectively [3][8]. - For 2025, the Zacks Consensus Estimate projects a significant narrowing of losses for Nabors Industries from $20.28 per share a year ago to $4.86, indicating a 76% year-over-year improvement. Revenue is expected to reach $3.2 billion, reflecting a 10.2% year-over-year increase [5][9]. Factors Supporting Growth - Nabors Industries has achieved record-setting technology milestones with its PACE® series rigs, enhancing efficiency and reducing costs, which strengthens its competitive position. The introduction of the PACE-X Ultra X33 rig is expected to revolutionize shale exploration in South Texas [10]. - The company has prioritized debt reduction, generating $41 million in adjusted free cash flow in Q2 2025, a turnaround from negative cash flow in Q1. Nabors plans to use $250 million from a recent notes offering for further debt reduction [11]. - A strategic divestiture of Quail Tools for $600 million has reduced net debt by over 25% and is expected to save $50 million annually in interest, enhancing financial flexibility and shareholder value [12]. - International growth opportunities are significant, particularly in the Middle East and Latin America, with over 25 rig deployment opportunities identified. The SANAD joint venture in Saudi Arabia is expanding, providing long-term revenue visibility [13]. Challenges Facing the Company - Nabors Industries faces challenges with customer concentration, particularly with Pemex in Mexico, where payment delays have been significant. This situation could impact liquidity and earnings [14][15]. - Geopolitical and market volatility pose risks, especially in regions like Saudi Arabia and Argentina, where client slowdowns and project delays could affect performance [16]. - The company remains heavily reliant on the SANAD joint venture for growth, which is subject to Saudi Aramco's capital spending plans. Any slowdown in Aramco's expansion could negatively impact Nabors' international revenues [17]. - Nabors Industries has a long-term debt of $2.7 billion, with a total debt-to-total capital ratio of 80.7%. High interest expenses limit financial flexibility, making the company vulnerable to credit market conditions [18]. Conclusion - Nabors Industries' stock has shown strong performance relative to peers, with expected revenue and earnings improvements in 2025. The company's technological advancements and strategic debt reduction efforts position it favorably for future growth. However, high debt levels and customer concentration issues present risks that need to be managed effectively [19].

Core Points - Nabors Industries Ltd. will discuss its third-quarter operating results on October 29, 2025, at 10:00 a.m. Central Time [1] - The earnings release will occur after market close on October 28, 2025 [1] Conference Call Details - The conference call can be accessed via US Toll Free number (888) 317-6003, Canada Toll Free (866) 284-3684, and International (412) 317-6061 [2] - Participants are advised to call 10 to 15 minutes early for proper connection [2] Replay Information - The conference call will be recorded and available for replay until November 5, 2025, at 4:00 p.m. CT [3] - Replay can be accessed using the North America number (877) 344-7529 or International (412) 317-0088 with Conference Replay Entry Number: 9724612 [3] Webcast Information - A live audio webcast of the conference call will be available on Nabors' website [4] - The earnings release and any supplemental presentation will also be downloadable from the website [4] Company Overview - Nabors Industries is a leading provider of advanced technology for the energy industry, operating in over 20 countries [5] - The company focuses on drilling, engineering, automation, data science, and manufacturing to innovate energy solutions and support the transition to a lower-carbon world [5]

Core Insights - Nabors Industries Ltd. and Caturus Energy have launched the PACE-X Ultra X33 rig, the most powerful onshore drilling system in the U.S., aimed at enhancing shale exploration and extraction in South Texas [1][10] - The rig is designed for high efficiency, environmental sustainability, and increased production capacity, addressing modern shale drilling challenges [2][5][18] Technological Advancements - The PACE-X Ultra X33 rig can drill laterals up to 4 miles and reach depths over 14,000 feet, making it suitable for complex well architectures [2][10] - It features a 1-million-pound mast rating and a racking capacity of 35,000 feet, improving operational efficiency by reducing pipe management time [3][8] - Equipped with three 2,000-horsepower mud pumps, the rig operates at pressures up to 10,000 psi, ensuring stability and optimized drilling rates in high-pressure environments [4][14] Environmental Considerations - The rig incorporates Cat Dynamic Gas Blending technology, allowing the use of cleaner-burning natural gas instead of conventional diesel, enhancing fuel efficiency and reducing carbon emissions [5][6] - This initiative aligns with industry efforts towards sustainable hydrocarbon production, setting new standards for responsible drilling practices [6][18] Strategic Implications for Caturus - Caturus manages approximately 200,000 net acres in the Eagle Ford and Austin Chalk formations, currently producing over 650 million cubic feet of gas equivalent daily [7][10] - The introduction of the PACE-X Ultra X33 rig is central to Caturus' strategy to scale production to 1 billion cubic feet per day by 2029 [7][10] - Enhanced drilling capabilities will allow Caturus to pursue more complex wells, reduce cycle times, and lower operational costs, improving financial returns [8][10] Industry Impact - The deployment of the PACE-X Ultra X33 rig signifies a transformative moment for U.S. onshore oil and gas, enabling operators to access previously unreachable reserves [17][18] - By combining advanced mechanical power with sustainable technologies, the rig addresses productivity and environmental concerns, contributing to America's energy future [18]