A month has gone by since the last earnings report for Nabors Industries (NBR). Shares have lost about 6.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Nabors due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
NBR Posts Narrower Than Expected Q1 Earnings, Revenues Beat Estimates
Nabors Industries reported a first-quarter 2026 adjusted loss of $1.54 per share, narrower than the Zacks Consensus Estimate of a loss of $2.39. Additionally, the metric is significantly above the prior-year quarter’s reported loss of $7.5 per share. This outperformance was mainly driven by higher adjusted operating income from its International Drilling segment.
The oil and gas drilling company’s operating revenues of $783.5 million beat the Zacks Consensus Estimate of $779 million. The top line also increased from the year-ago quarter’s $736.2 million, primarily supported by higher contributions from the U.S. Drilling, International Drilling and Drilling Solutions segments.
Adjusted EBITDA totaled $204.8 million, down from $206.3 million in the prior-year quarter and $221.6 million in the fourth quarter of 2025. The metric was also below our model estimate of $227.8 million.
Segmental Performances
U.S. Drilling generated operating revenues of $241.1 million, up from the year-ago quarter’s $230.7 million and slightly higher than the prior quarter’s $240.6 million. However, the figure missed our model estimate of $252.1 million.
Operating profit totaled $24.6 million compared with $31.6 million in the year-ago quarter. The figure missed our estimated profit of $33.9 million.
Adjusted EBITDA from the segment totaled $88.1 million, down from $92.7 million a year ago and $93.2 million in the previous quarter. The figure missed our estimated profit of $105.1 million.
Lower 48 average rig count increased to 65.3 rigs from 60.6 rigs in the prior-year quarter and 59.8 rigs in the fourth quarter of 2025. The company noted that it added four rigs in the Lower 48 market during the first quarter, bringing the current working rig count in the region to 66, up eight rigs since November 2025.
International Drilling reported operating revenues of $419.5 million, up from $381.7 million in the year-ago quarter but down from $423.8 million in the fourth quarter. Moreover, the figure beat our estimate of $389.4 million.
Operating profit totaled $40.8 million compared with $33 million in the year-ago quarter. The figure missed our estimated profit of $43.8 million.
The segment’s adjusted EBITDA was $121.3 million, compared with $115.5 million a year ago and $131.3 million in the preceding quarter. The figure beat our estimate of $120.6 million. Average rigs working increased to 92.6 from 85 in the year-ago period.
Nabors stated that its SANAD land drilling joint venture deployed one newbuild rig in Saudi Arabia during the quarter, bringing total newbuild deployments to 15. Four more newbuilds are scheduled for 2026. The company also reactivated one previously suspended SANAD rig, with another resumption expected in the second quarter.
Drilling Solutions recorded operating revenues of $106.2 million, up from $93.2 million a year ago but down from $107.9 million in the prior quarter. The figure missed our estimate of $110 million.
Operating profit totaled $31.9 million compared with $32.9 million in the year-ago quarter. The figure also missed our estimated profit of $33.9 million.
Adjusted EBITDA totaled $38.7 million, compared with $40.9 million in the year-ago quarter and $41.3 million in the fourth quarter. Moreover, the figure slightly missed our estimate of $39 million.
Rig Technologies generated operating revenues of $27.2 million, down from $44.2 million in the year-ago quarter and $37.7 million in the previous quarter. Moreover, the figure missed our estimate of $38 million.
Operating loss totaled $1.9 million in contrast to an operating profit of $4.3 million in the year-ago quarter. The figure missed our estimated profit of $1.1 million.
The segment’s adjusted EBITDA was $0.5 million, compared with $5.6 million a year ago and $4.9 million in the prior quarter. The figure also missed our estimate of $2 million.
Financial Position
Nabors’ total costs and expenses increased to $765.3 million from $670.6 million in the year-ago quarter. However, the amount was lower than our prediction of $779 million. As of March 31, 2026, Nabors had $500.9 million in cash and short-term investments. Long-term debt was about $2.1 billion, with a debt-to-capitalization of 78.8%.
During the quarter, Nabors redeemed the remaining outstanding balance of its 2028 notes, reducing total debt to $2.1 billion. Since year-end 2024, the company has reduced total debt by $386 million. Its next debt maturity is $250 million due in 2029, and the weighted average debt maturity has been extended to more than five years.
Net cash provided by operating activities was $113.3 million in the first quarter. Capital expenditures, net of proceeds from asset sales, totaled $161.6 million, resulting in adjusted free cash flow of negative $48.2 million. This marked an improvement from negative $61.2 million in the year-ago quarter.
Q2 & 2026 Guidance
For the second quarter of 2026, Nabors expects the Lower 48 average rig count to be in the range of 67-68 rigs, with a Lower 48 daily adjusted gross margin of approximately $13,300. Alaska and Gulf of America combined adjusted EBITDA is expected to be around $15 million.
For International Drilling, the company expects an average rig count of 93-95 rigs and a daily adjusted gross margin of approximately $17,400-$17,500. Drilling Solutions adjusted EBITDA is projected at about $39 million, while Rig Technologies adjusted EBITDA is expected to be around $3 million.
This company expects second-quarter capital expenditures of $180-$190 million, including $75-$80 million for newbuilds in Saudi Arabia. The company also projects adjusted free cash flow of approximately $10 million, including free cash consumption at SANAD of around $10 million.
With activity on the rise, the company anticipates maintaining a measured approach to capital allocation, targeting full-year spending in the previously guided range of $730-$760 million, including $360-$380 million for the SANAD newbuilds.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a flat trend in estimates review.
VGM Scores
Currently, Nabors has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. However, the stock has a score of A on the value side, putting it in the top 20% for value investors.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Nabors has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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Nabors Industries Ltd. (NBR): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).