DNOW (NYSE:DNOW) Releases Quarterly Earnings Results, Misses Expectations By $0.04 EPS

Key Points

• DNOW missed profit expectations, reporting EPS of $0.01 versus the $0.05 consensus estimate, while earnings also fell sharply from $0.22 per share a year ago.
• Revenue beat forecasts at $1.18 billion, above the $1.08 billion estimate and up 97.5% year over year, showing strong top-line growth despite weaker profitability.
• Management said ERP-related disruptions at MRC Global U.S. weighed on results, but the environment is stabilizing and SAP migration is unlocking about $40 million of inventory, with synergy savings now expected to reach roughly $30 million annually near term.

DNOW (NYSE:DNOW - Get Free Report) announced its earnings results on Thursday. The oil and gas company reported $0.01 earnings per share (EPS) for the quarter, missing analysts' consensus estimates of $0.05 by ($0.04), FiscalAI reports. The company had revenue of $1.18 billion for the quarter, compared to the consensus estimate of $1.08 billion. DNOW had a positive return on equity of 5.43% and a negative net margin of 4.14%.The company's revenue was up 97.5% compared to the same quarter last year. During the same period last year, the firm posted $0.22 EPS.

Here are the key takeaways from DNOW's conference call:

• ERP disruptions at MRC Global U.S. materially weighed on results — MRC U.S. revenue fell about $94 million (16% YoY), the business showed a high 31% decremental to adjusted EBITDA, and Q1 adjusted EBITDA was only $39 million, with incremental temporary ERP-related costs and elevated SG&A driving a Q1 net loss of $44 million.
• Management reports the MRC Oracle environment is stabilized and migration to DNOW’s SAP is accelerating (Permian locations now live), which has already unlocked ~$40 million of inventory to improve fulfillment, service levels, and support revenue/margin recovery.
• Integration cost savings are accelerating — the company raised its near‑term annualized synergy expectation to about $30 million (with a 3‑year target of $70 million) and is realizing facility consolidations sooner than planned.
• Board pursued opportunistic capital returns amid what management views as an undervalued stock: $50 million of repurchases in Q1 (total $87 million to date of a $160 million program), funded in part with debt while targeting net leverage of ~1–2x by year‑end.
• Outlook and growth levers: management expects Q2 revenue up mid‑to‑high single digits sequentially, full‑year 2026 revenue near $5 billion with EBITDA ~4.5% and operating cash flow of $100–$200 million, while highlighting midstream, upstream, gas utilities and early data‑center wins (~$30 million orders) as priority growth markets.

DNOW Trading Up 0.3%

Shares of DNOW traded up $0.03 on Friday, reaching $13.08. 4,913,954 shares of the company's stock were exchanged, compared to its average volume of 3,172,987. The business has a 50 day moving average price of $12.11 and a two-hundred day moving average price of $13.48. DNOW has a 12 month low of $10.94 and a 12 month high of $17.26. The stock has a market capitalization of $2.43 billion, a P/E ratio of -17.92 and a beta of 0.85. The company has a current ratio of 2.34, a quick ratio of 1.11 and a debt-to-equity ratio of 0.18.

Key Stories Impacting DNOW

Here are the key news stories impacting DNOW this week:

• Positive Sentiment: DNOW reported first-quarter revenue of $1.18 billion, which came in above analyst expectations of $1.08 billion and rose sharply year over year, suggesting solid demand and helping support the stock. DNOW Reports First Quarter 2026 Results
• Positive Sentiment: The company also highlighted its first-quarter 2026 results and midstream expansion plans, which may reinforce the longer-term growth story for investors. Assessing DNOW (DNOW) Valuation After Recent Share Price Momentum And Midstream Expansion Plans
• Neutral Sentiment: Several earnings recap articles and the earnings call presentation are drawing attention to the quarter, but they largely repeat the same key takeaways: strong revenue growth, but weaker profitability. DNOW Inc. 2026 Q1 - Results - Earnings Call Presentation
• Neutral Sentiment: Market commentary notes that DNOW beat on revenue but missed earnings estimates, which is a mixed signal for the stock. DNOW’s NYSE: DNOW Q1 CY2026: Beats On Revenue
• Negative Sentiment: DNOW posted earnings of $0.01 per share, below the $0.05 consensus estimate and far under last year’s $0.22, raising concerns about profitability and margin pressure. DNOW (DNOW) Q1 Earnings Lag Estimates
• Negative Sentiment: Rosen Law Firm announced and reiterated a securities class action investigation into whether DNOW may have issued misleading business information, which can add legal overhang and pressure sentiment. ROSEN, LEADING INVESTOR COUNSEL, Encourages DNOW Inc. Investors to Inquire About Securities Class Action Investigation - DNOW

Institutional Trading of DNOW

Several institutional investors and hedge funds have recently made changes to their positions in DNOW. Quarry LP boosted its position in shares of DNOW by 712.6% in the 4th quarter. Quarry LP now owns 1,942 shares of the oil and gas company's stock worth $26,000 after purchasing an additional 1,703 shares during the last quarter. EverSource Wealth Advisors LLC lifted its stake in DNOW by 190.5% in the second quarter. EverSource Wealth Advisors LLC now owns 2,423 shares of the oil and gas company's stock valued at $36,000 after buying an additional 1,589 shares during the period. Arax Advisory Partners boosted its holdings in DNOW by 336.3% during the fourth quarter. Arax Advisory Partners now owns 2,797 shares of the oil and gas company's stock worth $37,000 after buying an additional 2,156 shares during the last quarter. Kemnay Advisory Services Inc. bought a new position in DNOW during the fourth quarter worth about $46,000. Finally, Quadrant Capital Group LLC grew its position in shares of DNOW by 266.4% during the 4th quarter. Quadrant Capital Group LLC now owns 3,620 shares of the oil and gas company's stock worth $48,000 after buying an additional 2,632 shares during the period. Institutional investors own 97.63% of the company's stock.

Analyst Upgrades and Downgrades

DNOW has been the topic of several research reports. Weiss Ratings downgraded shares of DNOW from a "hold (c)" rating to a "sell (d+)" rating in a report on Friday, February 27th. Zacks Research downgraded DNOW from a "hold" rating to a "strong sell" rating in a research report on Tuesday, March 24th. Stifel Nicolaus lowered their price target on DNOW from $18.00 to $16.00 and set a "buy" rating on the stock in a research note on Monday, February 23rd. Finally, Wall Street Zen downgraded DNOW from a "hold" rating to a "sell" rating in a research report on Saturday. Two investment analysts have rated the stock with a Buy rating and two have issued a Sell rating to the stock. Based on data from MarketBeat.com, DNOW presently has an average rating of "Hold" and an average target price of $17.00.

About DNOW

DistributionNOW NYSE: DNOW is a global distributor of energy and industrial products, serving a broad range of end-markets including oil and gas, petrochemical, power generation, and industrial manufacturing. Headquartered in Houston, Texas, the company provides solutions across the life cycle of energy and industrial assets, with an emphasis on safety, reliability and operational efficiency.

The company’s core product portfolio includes piping systems and related components (such as valves, fittings, flanges and gaskets), instrumentation, electrical and automation equipment, fasteners, industrial safety supplies, chemicals and composite products.

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