Nabors Industries (NBR +3.4%) extends yesterday's big gains after posting strong Q4 results, and Morgan Stanley thinks shares can move a lot higher, upgrading NBR to Overweight from Equal Weight and raising its price target to $28 from $18.
NBR has underperformed peers Helmerich & Payne (HP) and Patterson-UTI (PTEN) by ~25% since Q3 2013 on poor operational execution and a muddled corporate strategy, but Stanley sees signs that NBR's North America results have bottomed and execution has gained relative traction.
The firm also expects operational streamlining to gain momentum over coming quarters and is encouraged by the appointment of a new CFO.
Nabors Industries (NBR +11%) surges to 52-week highs after reporting Q4 results that beat Wall Street expectations and offering an optimistic near-term outlook.
“We believe we’ve seen the bottom” in the drilling rig market, CEO Tony Petrello said in today's earnings call, adding that rig rates increased modestly in Q4 but could rise higher this year.
Daily rates for highly specialized walking rigs have begun to increase as more U.S. oil companies use multiwell drilling platforms, Petrello says; a turnaround in the drilling business could lift land drillers out of their earnings slump.
NBR's fleet of ~150 pad-compatible walking rigs saw 94% utilization in the Q4, while demand for its older, mechanical rigs continues to lag behind.
Most other deepwater drillers also are higher: PKD +2%, HP +1.7%, PDS +1.2%.
NBR's completion and production services, which includes its U.S. well servicing and pressure-pumping operations, posted a Y/Y adjusted operating income drop of 21%; adjusted operating earnings at the drilling and rig services business rose 11%.
While its international rig count was flat in Q4, NBR was able to boost margins due to lower costs to move rigs and other items.
Says it reinvested $1.4B in new rigs and technological upgrades while cutting its debt level by $870M.
Last year should represent "the low point in Nabors' protracted five-year tough," CEO Tony Petrello says, adding that he sees "substantial, year-over year quarterly improvement" in results starting next quarter.
Cowen lowers its estimates on oil service and drilling stocks (OIH) after an internal survey estimates slower than expected 4% growth in exploration and production spending in 2014, presenting a difficult scenario for the stocks to perform well (Briefing.com).
The firm downgrades and cuts earnings estimates for Baker Hughes (BHI -1.5%), Cameron (CAM -0.4%), Nabors Industries (NBR -2%), CGG (CGG -0.2%), Superior Energy (SPN -1.9%) and Helmerich & Payne (HP +1.1%) to Market Perform from Outperform as it reduces industry growth estimates for 2014 and 2015.
Nabors Industries (NBR) -2.4% AH after the oilfield services company swung to an unadjusted Q3 loss.
The reported $104.6M loss, which compared with a year-earlier profit of $76.4M, included $242.2M in writedowns and other charges and $3.3M in asset-sale losses.
Completion and production services, which includes U.S. well servicing and pressure pumping operations, posted a Y/Y adjusted operating income drop of 52%; operating earnings for the drilling and rig services business fell 11%.
Nabors Industries (NBR +2.6%) shares push higher after the drilling contractor agrees to sell its Alaska-focused support services unit Peak Oilfield Service to Bristol Bay Native Corp. for an undisclosed sum.
NBR says the sale and other Q3 asset sales will more than cover the ~$207M premium paid to refinance $785M of higher-cost debt through its recent tender offer which reduced annual interest expense by more than $40M.
Though offshore drilling fundamentals remain challenged, Deutsche Bank believes some oilfield services stocks (OIH) are "very underappreciated."
The firm's top three sector stocks: Baker Hughes (BHI +2%), with a long restructuring that's finally complete; Halliburton (HAL +1.3%), whose international margins should improve dramatically; and Nabors (NBR +1.2%), whose high-end U.S. rigs and strong international business will drive growth.
Goldman Sachs removes Nabors Industries (NBR -5.2%) from its Conviction Buy list and drops its price target to $19.50 from $22, disappointed by NBR's downside guidance as it had felt confident in its forecast of $119M in EBIT. Goldman cuts its estimates for 2013 and 2014 EPS to $0.82 and $1.37 from $1.04 and $1.85, respectively; 2013-14 EBITDA was cut 5% and 9%.
Nabors Industries (NBR) warns that its Q2 will come in below estimates. Operating Income is projected to be in the range of $88M to $91M, with the shortfall most pronounced in its Rig Services and Completion and Production Services lines. The firm cites lower sales of capital equipment and reduced service and rental activity for the miss, along with adverse weather and intense competition, particularly for pressure pumping in the U.S. and Canada. Shares -4% AH.
Fitch revises its outlook for Nabors Industries (NBR -1.4%) to Negative while affirming the drilling contractor's credit rating at BBB, citing a long-term trend of declining market share in the U.S., low utilization on older equipment, industry conditions including a lower average U.S. rig count in 2013, and risks to the rig count from the transition to pad drilling and other higher efficiency operations.
Nabors Industries (NBR -2.8%) reverses gains made at the open to trade lower on a mixed Q1 result late yesterday. Net profits fell 26% Y/Y as the drilling contractor was hit by weaker profits across all its main business segments, including a steep decline in its U.S. drilling and rig-services division. During its call, the company noted that it's looking to shed its E&P assets, including its barges and jackup rigs, and says its hired an outside adviser to review its assets over the summer.
Nabors Industries (NBR +4.8%) rallies after yesterday's move to add two independent directors to its board under pressure from its largest shareholder, Pamplona Capital. NBR CEO Anthony Petrello says the board is evaluating strategies to enhance shareholder value, including improving its capital structure, reviewing its mix of businesses and improving operating performance.
Nabors Industries (NBR -6.7%) shares swoon after dismal Q4 results which Tudor Pickering analysts call "messy/disappointing," saying no business line is the single culprit but lower baseline suggests weaker than expected 2013 EPS. Positives included ~$460M in net debt reduction and nine additional long-term land rig contracts, but those were "overshadowed by operational shortfall."
More on Nabors' (NBR) Q4 results: Adjusted operating earnings for the U.S. lower 48 land-drilling business, NBR's largest segment, fell 27% Y/Y, while its completion and production services segment dropped 50% amid weakness in the domestic pressure-pumping business. Expects a marked decline in Q1 income given low rig counts and depressed spot market rates. Shares -2.3% AH.