Nabors Industries Reports Fourth Quarter 2024 Results: A Mixed Bag of Surprises and Challenges

Nabors Industries Ltd. (NYSE: NBR) recently announced its fourth quarter 2024 earnings, providing investors with a glimpse into the company's financial performance and strategic direction. The results were a mix of surprises and challenges, reflecting the dynamic nature of the energy industry and the company's ongoing efforts to adapt to market conditions.

Financial Performance Overview

Nabors reported operating revenues of $730 million for the quarter, compared to $732 million in the third quarter. The net loss attributable to Nabors shareholders was $54 million, compared to a net loss of $56 million in the previous quarter. This equates to a loss of $6.67 per diluted share, compared to a loss per diluted share of $6.86 in the third quarter. Adjusted EBITDA for the quarter was $221 million, compared to $222 million in the third quarter.

Segment Performance

* International Drilling: Adjusted EBITDA totaled $112.0 million, compared to $116.0 million in the third quarter. Average rig count increased slightly to 85, driven by rig additions in Argentina and Saudi Arabia, mostly offset by rig suspensions in the Kingdom. Daily adjusted gross margin for the fourth quarter averaged $16,687, reflecting incremental costs associated with these rig start-ups and suspensions.
* U.S. Drilling: Adjusted EBITDA was $105.8 million, compared to $108.7 million in the third quarter. Nabors' average rig count in the Lower 48 totaled 66, versus 68 in the third quarter. Daily margins held up well in the fourth quarter, with daily adjusted gross margin averaging $17,220.



Strategic Initiatives and Outlook

Nabors shareholders approved the issuance of shares to Parker Wellbore stockholders in connection with the merger between Parker and Nabors. The merger is expected to close during the first quarter of 2025, pending certain international regulatory approvals. Nabors also received awards for three rigs in Argentina and one in Colombia, demonstrating the company's ability to secure new contracts and maintain a strong presence in international markets.

Looking ahead, Nabors is planning for stable market activity through the early part of 2025. The company is responding to this activity level with actions to improve efficiency and align its cost structure. Nabors' international businesses continued to expand in multiple markets, including Saudi Arabia and Argentina, with startups planned in the Kingdom, Argentina, Colombia, and Kuwait. The company projects these deployments will drive this segment's margins higher through the year.

Challenges and Opportunities

Nabors' fourth quarter results reflect the company's ongoing efforts to navigate the dynamic energy market and maintain a strong financial performance. While the company faced challenges in the U.S. market, its international businesses continued to expand, driving growth and improved margins. The pending merger with Parker Wellbore presents an opportunity for Nabors to advance its strategic objectives and create value for stakeholders.

As investors await Nabors' next earnings report, they can expect the company to continue focusing on operational efficiency, cost management, and strategic growth initiatives. The energy industry's volatility and the ongoing impact of geopolitical events will continue to shape Nabors' performance, but the company's strong international presence and strategic acquisitions position it well for the future.

In conclusion, Nabors Industries' fourth quarter 2024 results provided investors with a mixed bag of surprises and challenges. While the company faced headwinds in the U.S. market, its international businesses continued to drive growth and improved margins. The pending merger with Parker Wellbore presents an opportunity for Nabors to advance its strategic objectives and create value for stakeholders. As the energy industry continues to evolve, Nabors' strong financial performance and strategic initiatives position it well for the future.