Skip to main content

Second-quarter results at Nabors Industries (NBR) - Get Nabors Industries Ltd. Report will be hurt by an income-tax expense charge of about $15.7 million, or 5 cents a share.

The oil driller said after the bell Monday that the charge reflects the net effect of a U.S. tax payment, partially offset by a reduction in its Canadian deferred tax liability.

A Thomson First Call survey of analysts had expected the company to post second-quarter earnings of 71 cents a share before items.

The charge to U.S. current income tax expense arises from a one-time dividend-withholding tax in the amount of $36 million, or 12 cents a share, relating to redeeming common shares held by the foreign parent of a U.S.-based Nabors unit.

TheStreet Recommends

The offsetting tax benefit is the result of a recent change in Canadian tax laws that incrementally reduces statutory tax rates for both federal and provincial taxes over the next four years, the company said. This will not only reduce Nabors' future Canadian taxes but had the immediate impact of reducing Nabors' Canadian deferred tax liability by approximately $20.5 million, or 7 cents a share.

Shares of Nabors closed up 27 cents, or 0.8%, to $32.79.