Nabors Industries (NBR) Misses Q3 EPS by 1c

October 25, 2016 6:04 PM EDT

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Nabors Industries (NYSE: NBR) reported Q3 EPS of ($0.35), $0.01 worse than the analyst estimate of ($0.34). Revenue for the quarter came in at $519.7 million versus the consensus estimate of $541.31 million.

Anthony Petrello, Nabors' Chairman, President, and CEO, commented, "After a challenging downturn, we are experiencing significant utilization increases in our Lower 48 market, although spot market pricing continues to remain competitive. Similarly, our international markets are showing signs of impending activity increases. We are very encouraged by our customers' acceptance of our newest rig, the PACEĀ®-M800. We now have contracts for the first four M800s, with two already deployed, and awards for two more. Likewise, the high demand for our PACEĀ®-X rigs has brought the utilization of that fleet to over 80%. This increased demand is beginning to exert upward pressure on pricing for these top-end rigs, although, in the near-term, our fleet average margins will remain under pressure due to expiring long-term contracts. We are also implementing a cost-effective plan to enhance other classes of our existing AC rig fleet to incorporate most of the features of these rigs. Regardless of how the recovery unfolds, we expect our reduced cost structure, improved performance and our various technology initiatives to significantly increase operating leverage across our global fleet.

"We recorded a sequential decline in adjusted operating income, as a modest increase in Rig Services was more than offset by reduction in one-time gains in Drilling, as compared to the second quarter. We expect this trend in operating income to continue into the beginning of 2017 driven by lower U.S. Drilling margins and International utilization."

For earnings history and earnings-related data on Nabors Industries (NBR) click here.

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