Nabors 1Q Profit Climbs 62% On U.S. Drilling Activity
04/24/2012| 04:42pm US/Eastern
Nabors Industries Ltd.'s (>> Nabors Industries Ltd.) first-quarter profit jumped 62% on continued revenue growth in its continental U.S. drilling business.
The stronger-than-expected results continue Nabors's streak of improved core earnings, as U.S. oil-and-gas producers adopt increasingly complex drilling techniques to access harder-to-reach reserves, boosting the contractor's top line.
At the same time, Nabors is working to improve its operational efficiency after the company acknowledged it strayed off target in its exploration and production forays, which led it to miss growth opportunities in the U.S. The company last month unveiled plans to raise at least $800 million from selling oil and gas properties and other noncore businesses, the latest in a series of divestitures.
Heavy North American drilling activity also helped boost earnings for rival Schlumberger Ltd. (SLB), which on Friday reported a stronger-than-expected core profit.
Nabors posted a profit of $134.1 million, or 46 cents a share, up from $82.8 million, or 28 cents a share, a year earlier. Excluding impairment charges and other adjustments, per-share earnings from continuing operations rose to 65 cents from 29 cents as revenue jumped 32% to $1.84 billion.
Analysts polled by Thomson Reuters were looking for a 50-cent per-share profit with $1.8 billion of revenue.
Operating earnings in Nabors's U.S.-lower-48 land-drilling business, its largest segment, grew 31%, while its domestic pressure-pumping business reported 54% higher earnings. Profit rose 17% in the smaller international business.
Shares were up 1.4% at $16.18 in light after-hours trading Tuesday. The stock had declined 50% over the past year through Tuesday's close.
-By Drew FitzGerald, Dow Jones Newswires; 212-416-2909; Andrew.FitzGerald@dowjones.com