Shares of NOW Inc. (NYSE:DNOW) rose sharply on Thursday, increasing more than 15% by 10:45 a.m. EDT after the oil-field equipment distributor posted expectation-beating second-quarter results.
NOW reported $777 million in revenue during the second quarter, which was up 19% year over year and came in nearly $16 million ahead of the consensus estimate. The company also reported $10 million ($0.10 per share) of adjusted net income, which was $0.07 per share ahead of analysts' expectations and a vast improvement from the year-ago adjusted loss of $0.10 per share.
"I couldn't be more excited about the results our organization produced in the second quarter," stated CEO Robert Workman in the earnings press release. He noted that the company delivered a significant improvement in margins in what's typically a seasonally softer quarter due to lower activity levels in Canada. However, the company more than offset its weakness north of the border by delivering strong sales growth in the U.S., thanks to a big uptick in drilling activities in the Permian Basin, which drove increased demand for the products it distributes.
NOW continues to anticipate that it will deliver revenue growth in the "high-teens percentage range" this year thanks to the continued strength of drilling activities across U.S. shale plays. It also noted that it's starting to see several green shoots internationally, including some progress on major energy infrastructure projects in Canada and a pickup in offshore drilling activities in places like Norway. Those improving market conditions increase its optimism for what lies ahead.