Shares of NOW Inc (NYSE:DNOW) jumped on Wednesday and were up by nearly 14% at 10:45 a.m. EDT after the company posted expectation-beating first-quarter results.
NOW reported $764 million in revenue during the first quarter, which was a 21% improvement from the year-ago period and 14% higher sequentially. It also topped analysts' expectations by nearly $45 million.
Meanwhile, the company reported an adjusted profit of $1 million, or $0.01 per share, which was a significant improvement from the year-ago quarter when it reported an adjusted loss of $0.15 per share. While earnings were flat versus the fourth quarter, they came in $0.03 per share ahead of analysts' consensus estimate.
Fueling the company's stronger-than-expected results was an increase in oil and gas activity levels around the world. The U.S. led the way as a 31% uptick in the rig count fueled a 28% rise in NOW's revenue. The main contributor was the red-hot Permian Basin, where the company added several new customers during the quarter.
NOW remains optimistic about what's ahead in 2018 due to the improving conditions in the oil market, thanks to higher prices. The company currently expects revenue to rise by a low double-digit percentage rate, with upside potential into the high teens if customers ramp up spending. This forecast suggests 2018 will be a good year for the company.