Nabors Guides for Q2 - Analyst Blog
June 21 2011 - 11:45AM
Zacks
Weighed down by lower-than-expected performances in the Pressure
Pumping and International business units, Nabors Industries
Ltd. (NBR) projects operating income in the range of $165
million to $170 million for the second quarter of 2011. The
negative effects will be partially offset by strong contributions
from the U.S. Lower 48 and Canadian operations.
For full-year 2011, global land drilling contractor, Nabors,
expects operating income to reach about $900 million.
Management commented that Superior Well Services, bought in
August, 2010, to boost pressure pumping operations, failed to
function as per expectation in the second quarter, thereby hurting
results. This was primarily due to unfavorable weather conditions
in the Bakken and Marcellus areas coupled with glitches in start-up
of the new equipments. Superior is expected to operate smoothly by
the end of 2011.
Internationally, delays in contract awards along with
geo-political disruptions slowed down the company’s activities in
Saudi Arabia and Iraq and, to some extent in Yemen, Colombia and
Mexico. We expect this tardiness to persist throughout 2011 and
improve in 2012.
On a positive note, Nabors’ U.S. Lower 48 segment won six more
new build contracts since the last quarter and is in the process of
working with nine legacy rigs.
Barbados-based Nabors conducts oil, gas and geothermal land
drilling operations and is one of the largest land well servicing
companies and workover contractors in the U.S. The company competes
with peers such as Patterson-UTI Energy (PTEN) and
Pride International (PDE).
We are maintaining our long-term Neutral rating on the
stock.
NABORS IND (NBR): Free Stock Analysis Report
PATTERSON-UTI (PTEN): Free Stock Analysis Report
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