Nabors Industries’ geographic performance
Nabors Industries (NBR) is 2.3% of the iShares US Oil Equipment & Services ETF (IEZ). IEZ declined 24% in the past year versus a 55% decrease in NBR’s stock price. NBR’s US operations witnessed a 56.5% revenue rise in 4Q17 versus 4Q16. Its revenues from its international operations, which accounted for 50% of its 4Q17 revenues, increased by a relatively modest 11% during the period.
NBR’s operating income by segment
By adjusted EBITDA (earnings before interest, tax, depreciation, and amortization), NBR’s international operations remained steady in 4Q17 compared to 4Q16, while the Drilling Solutions segment registered a ~456% rise from 4Q16 to 4Q17.
Earnings drivers: Negatives
- 1% lower average rigs in NBR’s international operations
- delays in the commencement of certain rig deployments in the international operations
- operating margin growth slowed in NBR’s international operations
Factors affecting 4Q17 results positively
- 47% higher average US rigs working in 4Q17 compared to 4Q16
- 4% higher average Canadian rigs working in 4Q17 compared to 4Q16
- an increase in daily average margins for the U.S. Drilling segment
- an improvement in the US onshore day rate for higher-specification rigs
- an increase in rig equipment shipments, benefiting the Rig Technologies segment
Next in this series, we’ll discuss Nabors Industries’ returns.