Nabors Industries Ltd. (NYSE: NBR) reported second-quarter 2016 results after markets closed Tuesday. The oilfield services company posted an adjusted diluted net loss per share of $0.26 on revenues of $517.1 million. In the same period a year ago, the company reported a net loss of $0.13 on revenues of $863.37 million. Second-quarter results also compare to the Thomson Reuters consensus estimates for net loss of $0.45 and $503.3 million in revenues.
Net loss for the quarter totaled $0.65 per share, including a $0.34 loss attributed to an impairment to the carrying value of C&J Energy Services.
CEO Anthony Petrello said:
Operating income for the Company remained flat quarter over quarter, largely attributable to favorable results in the Gulf of Mexico and our international business, offset by declines in Rig Services, Alaska and Canada. Our Gulf of Mexico results reflect amended contract terms for the MODS 400 deepwater platform rig, which include partial recovery of standby revenue for past quarters. … We remain diligent in managing the current cycle, particularly in light of the recent pullback in oil prices, while maintaining our flexibility to capitalize on opportunities.
The firm’s chief financial officer said:
[T]he steps taken to strengthen our liquidity position before the start of this downturn have proven extremely valuable and have prevented the need for onerous capital market transactions in a very unfavorable environment. In addition to our current cash balances, our $2.25 billion revolver remains undrawn. And although we see signs of improvement in both international and U.S. markets, we remain committed to maintaining liquidity and financial discipline, while targeting positive free cash flow during the remainder of the year.
The company did not offer other guidance, but analysts expect a second-quarter net loss of $0.42 on revenues of $507.57 million. For the year, analysts are looking for a net loss of $1.54 on revenues of $2.13 billion.
The quarterly results reflect cost cutting of around $96 million, no mean accomplishment. Like all good things, that is not likely to last forever. Rig count averaged 44 in the quarter, including an uptick at the end, and Nabors said that if prices stabilize around $50 a barrel, it expects rig count to increase gradually, but at lower average margins. In other words, drillers are going to drive hard bargains, especially for contract renewals.
Nabors stock closed at $8.69 on Tuesday, up about 0.9% for the day. Shares traded up about 3.6% after hours at $9.00. The stock’s 52-week range is $4.93 to $12.53. Thomson Reuters had a consensus 12-month price target of $11.95 before the report.