Nabors Industries Reports Declining Revenues and Increased Losses in Q3 2024

Nabors Industries Ltd. reported its financial results for the third quarter and the nine months ended September 30, 2024, revealing a challenging period marked by declining revenues and increased losses compared to the previous fiscal year.

For the three months ended September 30, 2024, Nabors generated operating revenues of $731.8 million, a slight decrease from $733.9 million in the same period of 2023. Total revenues and other income also fell marginally to $743.3 million from $744.1 million year-over-year. The company's total costs and other deductions increased to $766.3 million, up from $764.9 million, leading to a loss before income taxes of $22.9 million, compared to a loss of $20.7 million in the prior year. The net loss attributable to Nabors for the quarter was $55.8 million, or $6.86 per diluted share, worsening from a loss of $48.9 million, or $6.26 per diluted share, in Q3 2023.

For the nine months ended September 30, 2024, operating revenues totaled $2.2 billion, down from $2.3 billion in the same period of 2023. The net loss attributable to Nabors for this period was $122.4 million, a significant decline from a net income of $4.9 million in the prior year. The company’s adjusted operating income for the nine months also decreased to $310.9 million from $327.7 million.

Segment performance varied, with U.S. Drilling revenues declining by 16% to $786.5 million, attributed to a 15% decrease in the average number of rigs working. In contrast, International Drilling revenues increased by 7% to $1.1 billion, driven by an 8% rise in average rigs working. The Drilling Solutions segment saw a 6% revenue increase, while Rig Technologies experienced a 21% decline due to reduced U.S. activity.

Nabors' financial position showed a decrease in total assets to $4.6 billion from $5.3 billion at the end of 2023. Cash and cash equivalents fell to $451.6 million from $1.1 billion, while total current liabilities decreased to $571.6 million from $1.2 billion. The company reported a significant reduction in total shareholders’ equity, which dropped to $191.4 million from $326.6 million.

Strategically, Nabors entered into a merger agreement on October 14, 2024, to acquire Parker Drilling Company, which is expected to close in the first quarter of 2025, pending regulatory approvals. The company also amended its credit agreement in June 2024, allowing for up to $350 million in revolving loans. Despite these strategic moves, Nabors faced challenges from high interest expenses, which rose by 26% to $55.4 million in Q3 2024, reflecting the impact of increased borrowing costs.