DNOW Q2 profit beats on US segment growth
DNOW•Quarterly results and outlook
- US energy distributor's Q2 revenue rose, beating analyst expectations
- Adjusted EPS for Q2 beat analyst expectations
- Company repurchased $25 mln of stock in Q2, $75 mln year-to-date
Company did not provide specific guidance for the current quarter or full year.
Result drivers and key details
- U.S. segment growth - Co said revenue rose 13% in the U.S. segment, with midstream, gas utility, and upstream sectors showing strong sequential growth
- Operational execution - Adjusted EBITDA rose 54% sequentially, driven by stronger volumes and execution of integration and cost management initiatives
- Cash flow improvement - Record Q2 cash flow from operations attributed to strong collections and inventory streamlining
| Metric | Beat/Miss | Actual | Consensus Estimate |
|---|---|---|---|
| Q2 Revenue | Beat | $1.31 bln | $1.27 bln (5 Analysts) |
| Q2 Adjusted EPS | Beat | $0.12 | $0.10 (5 Analysts) |
| Q2 Adjusted Net Income | $21 mln | ||
| Q2 Net Loss | $21 mln | ||
| Q2 Adjusted EBITDA | $60 mln |
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 industrial machinery & equipment peer group is "buy". Wall Street's median 12-month price target for DNOW Inc. is $16.00, about 12.5% above its August 5 closing price of $14.22. The stock recently traded at 22 times the next 12-month earnings vs. a P/E of 17 three months ago.
