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

Core Insights - Nabors Industries Ltd. (NBR) reported a third-quarter 2025 adjusted loss of $3.67 per share, which was wider than the Zacks Consensus Estimate of a loss of $2.37 and also greater than the prior year's loss of $3.35 per share [1][10] - Operating revenues for NBR were $818.2 million, missing the Zacks Consensus Estimate of $842 million but increasing from $731.8 million in the year-ago quarter, driven by stronger contributions from International Drilling and Drilling Solutions segments [2][10] - Adjusted EBITDA rose to $236.3 million from $221.7 million year-over-year but fell short of the model estimate of $270.8 million [3] Segment Performance - U.S. Drilling generated operating revenues of $249.8 million, down 1.9% from $254.8 million in the prior year, but exceeded the model estimate of $226.4 million. Operating profit was $31.4 million, down from $41.7 million year-over-year and below the estimated profit of $47.2 million [4] - International Drilling's operational revenues increased to $407.2 million from $368.6 million a year ago, surpassing the estimate of $399.5 million. Operating profit rose to $45.5 million from $32.2 million, beating the estimate of $38.1 million [5] - Revenues from the Drilling Solutions segment totaled $141.9 million, up 78.4% from $79.5 million in the prior year, but missed the estimate of $160.9 million. Operating income increased to $50 million from $29.2 million, aligning with the estimate [6] - Rig Technologies reported revenues of $35.6 million, down 22.3% from $45.8 million in the prior year, missing the estimate of $53.7 million. Operating profit was $0.9 million, down from $2.8 million year-over-year and below the estimate of $4.1 million [7] Financial Position - Total costs and expenses decreased to $405.5 million from $766.3 million in the year-ago quarter, also lower than the prediction of $810.4 million. As of September 30, 2025, NBR had $428.1 million in cash and short-term investments [8] - Long-term debt stood at approximately $2.3 billion, with a debt-to-capitalization ratio of 80.2%. Capital expenditures totaled $202.3 million during the same period [9] Guidance - For Q4 2025, NBR anticipates a U.S. Drilling rig count of 57 to 59 rigs, with a daily adjusted gross margin of approximately $13,000. Combined adjusted EBITDA for Alaska and the Gulf of America is projected to reach around $25 million [11] - International operations are expected to have an average rig count of approximately 91 rigs, with a daily adjusted gross margin estimated at $18,100-$18,200. Adjusted EBITDA for the Drilling Solutions segment is projected at approximately $39 million, while Rig Technologies' adjusted EBITDA is expected to be around $5 million to $6 million [12] - Capital expenditures for Q4 2025 are planned between $180 million and $190 million, with about $90-$95 million allocated for new builds in Saudi Arabia [13] - NBR expects adjusted free cash flow for Q4 2025 to be around $10 million, with full-year adjusted free cash flow anticipated to be breakeven, a significant change from the earlier guidance of $80 million due to the Quail divestiture and outstanding collections from PEMEX related to 2024 [14]