Nabors Industries (NBR) Financials

Over the last four years, Nabors Industries (NYSE:NBR) has demonstrated consistent engagement in its core drilling and rig services business, but it faces ongoing challenges reflected in profitability and cash flow trends.

Positive Factors:

• Operating revenue has generally remained stable around the $700 million to $790 million quarterly range, indicating steady demand for Nabors' services.
• Gross profit margins are relatively strong, consistently exceeding $300 million in several recent quarters, suggesting operational efficiency in core activities excluding significant other expenses.
• Depreciation expense remains high but stable, consistent with investment in property, plant, and equipment supporting business operations.
• Operating cash flow remains positive and healthy, with quarterly net cash from continuing operating activities ranging from approximately $100 million to $200 million, showing good ability to generate cash from operations.
• Despite net losses reported in recent quarters, the company has maintained a positive net change in cash and equivalents in some quarters, reflecting prudent cash management and financing activities.

Neutral Factors:

• Other operating expenses are very large each quarter, often exceeding $1.5 billion, reflecting non-core costs or adjustments which impact operating income negatively but are not fully explained here.
• Issuance and repayment of debt fluctuate each quarter, showing active capital structure management but also indicating refinancing or debt repayment activities that have varied impact on cash flow.
• Noncontrolling interest amounts are significant, implying substantial ownership outside the common shareholders, which affects net income attributable to common shareholders.
• Accounts receivable and inventories have modest fluctuations indicating general operational changes but no clear trend in asset management improvement or deterioration.
• Diluted shares outstanding have remained relatively stable around 9 to 10 million shares, indicating limited dilution during this period.

Negative Factors:

• The company reported net losses attributable to common shareholders in most recent quarters, including a loss of over $53 million in Q4 2024, signaling ongoing profitability challenges.
• Total operating expenses frequently exceed total gross profit, leading to negative operating income in most quarters, a critical issue for sustainable profitability.
• Income tax expenses have sometimes been significant even in quarters with negative pre-tax income, adversely affecting net results.
• Large negative net changes in cash and equivalents in some quarters (e.g., Q1 2024 showing a $640 million reduction) reflect heavy investing or financing outflows that may pressure liquidity.
• Long-term debt levels remain very high, above $2.5 billion consistently, which could pose financial risk depending on interest rates and cash flow.

In summary, Nabors Industries is generating stable revenue and operating cash flow but struggles with profitability due to high operating expenses and other costs. The company’s high leverage and net losses raise potential concerns. Investors should watch for improvements in expense control and leveraging of operating cash flow to strengthen earnings.