Shares of NOW (NYSE:DNOW) slumped on Wednesday and were down 12% at 11 a.m. EDT. Driving the decline were the company's third-quarter financial results, which the supplier of oil-drilling equipment released before the opening bell this morning.
NOW reported revenue of $520 million, which was 4% higher than last quarter, though it was $18 million less than what analysts were expecting. However, the rise in revenue enabled the company to trim its adjusted loss to $36 million, or $0.34 per share, which was better than last quarter's adjusted loss of $0.40 per share and beat analysts' expectations by $0.04 per share. Driving that improvement on the bottom line was a decline in costs, which were lower than forecast.
Sales to U.S. customers caused the rebound in revenue. Overall, sales in the U.S. were up 10% from last quarter, to $372 million. However, sales would have been up only 5% were it not for recent acquisitions. Meanwhile, revenue in Canada slumped 22%, to $67 million, due to fluctuations in drilling activity, while international revenue fell 26%, to $81 million, as a result of the continued deterioration of the offshore market.
NOW CEO Robert Workman said that the company is "emerging from what we hope was the bottom of this cycle." In spite of that, he also warned that "international offshore softness and seasonal holiday implications suggest a choppy recovery." That outlook implies that next quarter could still be tough, which is a big reason why the stock is down today.