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3 Big Things that Affected Nabors Industries’ 4Q15 Earnings

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Nabors Industries’ fiscal 4Q15 revenues

Nabors Industries (NBR) released its fiscal 4Q15 results on February 16. The company recorded total revenues of $693.6 million, down 61% from the $1.8 billion it recorded in 4Q14. Nabors Industries’ revenues for the latest quarter include $45 million in losses from unconsolidated affiliates. In comparison, fiscal 4Q15 revenues for Schlumberger (SLB), NBR’s peer, fell 39% year-over-year.

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Nabors Industries’ 4Q15 earnings

The fiscal 4Q15 adjusted net loss per share for Nabors Industries is $0.22. This loss exceeded the consensus sell-side analyst estimated loss per share of $0.30 for the quarter. Between fiscal 2Q13 and 3Q13, NBR’s adjusted earnings per share rose 2.9x. Following energy sector weakness, NBR’s adjusted earnings crashed in fiscal 2015. Compared to 4Q14, when adjusted earnings were $0.33, the company switched to a loss in 4Q15.

On average, Nabors’ adjusted earnings per share have exceeded consensus earnings by ~35% in the past 12 quarters. Nabors Industries is 2.4% of the VanEck Vectors Oil Services ETF (OIH), an ETF tracking an index of 25 oilfield service companies.

What affected Nabors Industries’ reported earnings in fiscal 4Q15?

In fiscal 4Q15, NBR’s reported net loss was $163.6 million. This loss is an improvement over fiscal 4Q14, when NBR reported an $891.1 million net loss. In 4Q14, NBR recorded $1.01 billion in impairment and other charges.

The three big factors behind the net loss are:

  • a pre-tax $123.5 million asset impairment and other charges
  • an operating loss in the U.S. Drilling segment following upstream companies’ lower exploration and production activity
  • a 13% lower onshore rig count in fiscal 4Q15 compared to 3Q15

Nabors Industries’ fiscal 2015 versus 2014 results

In fiscal 2015, NBR’s revenues were $3.79 billion, down 44% compared to ~$6.81 billion recorded in fiscal 2014. Net loss attributable to NBR in 2015 was $372.6 million, an improvement over the $670.6 million net loss in fiscal 2014.

Next in this series, we’ll discuss Nabors Industries’ returns.

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