Shares of NOW Inc. (DNOW), a leading global distributor of energy and industrial products, surged 5.38% on November 7, 2024, after the company reported its third-quarter 2024 financial results. Despite a slight revenue miss, investors were encouraged by DNOW's strong earnings, robust cash flow generation, and share repurchase activity.
For the quarter ended September 30, 2024, DNOW posted revenue of $606 million, up 3.1% year-over-year but narrowly missing analyst estimates of $614.9 million. However, the company's adjusted earnings per share (EPS) of $0.21 matched consensus expectations, driven by solid growth in its U.S. Process Solutions business and contributions from recent acquisitions.
During the quarter, DNOW repurchased $7 million of its common stock as part of its ongoing share repurchase program. As of September 30, 2024, the company boasted a strong cash position of $261 million and zero debt, providing ample financial flexibility to pursue growth opportunities and return capital to shareholders.
David Cherechinsky, President and CEO of DNOW, cited some project delays during the quarter but highlighted the company's differentiated service and products as well as its ability to generate robust cash flow. "We generated an additional $72 million in free cash flow during the quarter, yielding $273 million for the trailing four quarters, driven by record performance in our U.S. Process Solutions business, strong acquisition contribution and robust inventory velocity," Cherechinsky said.
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