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Nabors 1Q Profit Shrinks On Bad Hedges

The Associated Press

Nabors Industries Ltd. on Tuesday said its first-quarter profit fell by nearly 41 percent as a write-down tied to commodity price hedges offset strong international results for the Bermuda-based oil and gas drilling company.

Nabors reported net income for the three months ended March 31 of nearly $125.2 million, or 44 cents per share, down from a profit of $212 million, or 74 cents per share, in the year-ago quarter.

Among various one-time items, the company recorded a non-cash, pretax write-down of $75 million against the value of one of its oil and gas ventures, based on commodity prices on March 31.

Total revenue and other income fell nearly 14 percent to $1.14 billion from $1.32 billion in the year-ago period. The latest quarter's performance fell short of the consensus estimate of analysts surveyed by Thomson Reuters, who forecast revenue of $1.2 billion, on average.

Nabors' international business grew by 14 percent to $103 million in the latest quarter, while other segments, including Nabors' operations in Alaska and other parts of the U.S., posted smaller increases. Revenue at Nabors' Canadian operations declined by $29 million, falling to $13.2 million.

"Our first quarter results were better than expected, led by a strong international showing and solid performance from Alaska, U.S. offshore and our other operating segments," said Gene Isenberg, Nabors' chairman and chef executive.

Nabors reported first-quarter earnings after its shares rose $1.18, or 8.8 percent, to close at $14.59.

Before the market closed, Goldman Sachs analyst Daniel Boyd upgraded the oil services sector on an expected rebound in commodity prices, and a belief that uncertainty in oilfield services stocks will decline. Boyd upgraded his rating on shares of Nabors to "Buy" from "Neutral."