NESR Energy misses Q3 revenue expectations on reduced activity

Overview

• NESR Q3 revenue declines 12.2% yr/yr, missing analyst expectations

• Adjusted EBITDA for Q3 misses analyst estimates, reflecting operational challenges

• Net income for Q3 rises 16.7% sequentially, driven by tax adjustments

Outlook

• Company expects improved operating cash flow in Q4 due to enhanced collection activities

• Company focuses on maintaining strong margin performance and achieving exceptional growth

• Company prepares for execution of recently awarded contracts with strategic investments

Result Drivers

• COST REDUCTION - CFO Stefan Angeli attributes profitability to cost reduction initiatives and operational efficiency despite lower revenue

• CONTRACT TRANSITION - Reduced activity due to contract transition in Saudi Arabia impacted results, offset by tax adjustments

• INVESTMENT IN CAPACITY - Co continues to invest in capital expenditures and strengthen organizational capacity for new contracts

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 5 "strong buy" or "buy", no "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the oil related services and equipment peer group is "buy"

• Wall Street's median 12-month price target for National Energy Services Reunited Corp is $15.00, about 13.1% above its November 12 closing price of $13.03

• The stock recently traded at 11 times the next 12-month earnings vs. a P/E of 6 three months ago

Press Release: ID:nACStxT7Sa

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)