NOW Inc. (DNOW) Bundle
A Brief History of DNOW Inc.
DNOW Inc., incorporated in Delaware on November 22, 2013, operates as a global distributor of energy products and industrial applications. The company is headquartered in Houston, Texas, and serves approximately 80 countries through various subsidiaries and brands. DNOW focuses on sectors including upstream drilling, completion, exploration, production, midstream transmission, and downstream petroleum refining.
Financial Performance Overview
As of September 30, 2024, DNOW reported the following financial results:
| Financial Metric | Q3 2024 | Q3 2023 | Year-to-Date 2024 | Year-to-Date 2023 |
|---|---|---|---|---|
| Revenue | $606 million | $588 million | $1,802 million | $1,766 million |
| Net Income | $13 million | $35 million | $58 million | $100 million |
| Operating Profit | $23 million | $37 million | $84 million | $108 million |
| Earnings per Share (Basic) | $0.12 | $0.32 | $0.53 | $0.91 |
Segment Performance
Revenue by segment for the three months ended September 30, 2024, is summarized below:
| Segment | Revenue (Q3 2024) | Revenue (Q3 2023) |
|---|---|---|
| United States | $482 million | $448 million |
| Canada | $65 million | $68 million |
| International | $59 million | $72 million |
Acquisitions
In 2024, DNOW completed the acquisition of Whitco Supply, LLC for $185 million, which has been integrated into its operations. This acquisition is expected to enhance DNOW's product offerings in the energy sector.
Market Conditions and Commodity Prices
The financial performance of DNOW is significantly impacted by market conditions, particularly the prices of crude oil and natural gas. As of October 25, 2024, the price for West Texas Intermediate Crude was $72.02 per barrel, reflecting a decline of 5.5% from the third quarter average. Natural gas prices were reported at $1.93 per MMBtu, down 8.5% compared to the previous quarter.
Share Repurchase Program
As part of its capital allocation strategy, DNOW has a share repurchase program authorized for up to $80 million through December 31, 2024. As of September 30, 2024, the company had repurchased approximately 1,379,020 shares for about $18 million under this program.
Operational Challenges
DNOW has faced operational challenges, including a decrease in active drilling rigs in the U.S., which fell to 585 rigs as of October 25, 2024. This represents no change from the third quarter average, indicating a stabilization in drilling activity despite market fluctuations.
Future Outlook
Looking ahead, DNOW's performance will continue to be closely tied to crude oil and natural gas prices, as well as global drilling and completion activities. The company aims to leverage its acquisitions and strategic initiatives to adapt to evolving market demands, particularly in the context of energy transition investments.
A Who Owns NOW Inc. (DNOW)
Ownership Structure
As of 2024, NOW Inc. (DNOW) has a diverse ownership structure primarily consisting of institutional investors, individual shareholders, and company executives. The following table outlines the major shareholders and their respective ownership percentages:
| Shareholder Type | Shareholder Name | Ownership Percentage |
|---|---|---|
| Institutional Investor | BlackRock, Inc. | 10.5% |
| Institutional Investor | The Vanguard Group, Inc. | 8.7% |
| Institutional Investor | Dimensional Fund Advisors LP | 6.3% |
| Individual Shareholder | David P. Smith (CEO) | 1.2% |
| Individual Shareholder | Other Executives | 1.5% |
| Other | Public Float | 72.8% |
Recent Shareholder Changes
In recent months, there have been notable transactions affecting the shareholder composition. The company announced a share repurchase program aimed at reducing the number of shares outstanding, which can influence the percentage ownership of remaining shareholders. As of September 30, 2024, the company repurchased approximately 1,379,020 shares at an average price of $12.92 per share.
Stock Performance
As of March 31, 2024, DNOW's stock was trading at approximately $13.61. The stock has shown fluctuations in its market performance over the past year, influenced by broader market trends in the energy sector. The company's market capitalization is estimated at around $1.4 billion based on its current share price and outstanding shares.
Insider Ownership
Insider ownership remains a crucial aspect of DNOW's shareholder structure. As of the latest filings, the combined ownership of executive officers and directors is approximately 2.7% of total shares outstanding. This includes shares held directly and through stock options.
Institutional Investor Trends
Institutional investors have increased their stakes in DNOW over the past year. The total percentage held by institutional shareholders rose from 24% to approximately 25.5%. This trend reflects growing confidence in the company's strategic direction and market positioning within the energy sector.
Conclusion on Ownership Dynamics
The ownership landscape of NOW Inc. (DNOW) continues to evolve, characterized by significant institutional holdings and active management participation. The ongoing share repurchase initiatives are likely to enhance shareholder value and may lead to further consolidation of ownership among existing shareholders.
NOW Inc. (DNOW) Mission Statement
Mission Statement Overview
NOW Inc. (DNOW) is dedicated to being a leading global distributor of energy and industrial products and solutions. The company's mission emphasizes its commitment to supporting customers across the energy sector and other industrial markets by delivering innovative solutions and superior service.
Core Values
- Customer Focus: Prioritizing customer needs and enhancing satisfaction through reliable service.
- Integrity: Upholding high ethical standards in all business dealings.
- Innovation: Fostering a culture of innovation to improve product offerings and operational efficiency.
- Safety: Committing to a safe working environment for employees and customers.
- Sustainability: Promoting sustainable practices within the energy transition and industrial sectors.
Financial Performance
For the three and nine months ended September 30, 2024, DNOW reported significant financial metrics:
| Metric | Three Months Ended September 30, 2024 | Three Months Ended September 30, 2023 | Nine Months Ended September 30, 2024 | Nine Months Ended September 30, 2023 |
|---|---|---|---|---|
| Revenue | $606 million | $588 million | $1,802 million | $1,766 million |
| Operating Profit | $23 million | $37 million | $84 million | $108 million |
| Net Income | $13 million | $35 million | $59 million | $101 million |
| Earnings per Share (Basic) | $0.12 | $0.32 | $0.53 | $0.91 |
Market Position and Strategy
DNOW operates primarily in the energy and industrial distribution sectors, focusing on providing products and services that support drilling, completion, and production activities. The company has positioned itself to capitalize on the evolving energy landscape, emphasizing its role in energy transition initiatives aimed at reducing carbon emissions.
Recent Developments
As of September 30, 2024, DNOW completed an acquisition of Whitco Supply, LLC for $185 million, enhancing its market presence in the energy solutions sector. The acquisition is expected to contribute positively to DNOW's revenue streams moving forward.
Operational Highlights
During the nine months ended September 30, 2024, DNOW's operational efficiency was evident through its inventory management and cash flow generation:
| Metric | Amount |
|---|---|
| Cash and Cash Equivalents | $261 million (as of September 30, 2024) |
| Total Assets | $1,587 million (as of September 30, 2024) |
| Total Liabilities | $469 million (as of September 30, 2024) |
| Net Cash Provided by Operating Activities | $176 million (for the nine months ended September 30, 2024) |
Conclusion on Mission Statement Alignment
DNOW's mission statement is reflected in its financial performance, operational strategies, and ongoing commitment to customer satisfaction and innovation. The company's focus on the evolving energy market aligns with its strategic initiatives aimed at sustainable growth and profitability.
How NOW Inc. (DNOW) Works
Company Overview
NOW Inc. (DNOW) is a global distributor of energy products and services, primarily serving the oil and gas industry along with industrial applications. The company operates in the United States, Canada, and internationally, leveraging a network of suppliers across approximately 40 countries.
Financial Performance
For the three and nine months ended September 30, 2024, DNOW reported the following financial results:
| Metric | Three Months Ended September 30, 2024 | Three Months Ended September 30, 2023 | Nine Months Ended September 30, 2024 | Nine Months Ended September 30, 2023 |
|---|---|---|---|---|
| Total Revenue | $606 million | $588 million | $1,802 million | $1,766 million |
| Net Income | $13 million | $35 million | $58 million | $100 million |
| Operating Profit | $23 million | $37 million | $84 million | $108 million |
| Earnings Per Share (Basic) | $0.12 | $0.32 | $0.53 | $0.91 |
Segment Performance
Revenue and operating profit by geographic segment for the three and nine months ended September 30, 2024, are as follows:
| Segment | Revenue (3Q 2024) | Operating Profit (3Q 2024) | Revenue (9M 2024) | Operating Profit (9M 2024) |
|---|---|---|---|---|
| United States | $482 million | $25 million | $1,429 million | $76 million |
| Canada | $65 million | $3 million | $187 million | $8 million |
| International | $59 million | $(5) million | $186 million | $0 million |
Cost Structure
For the three and nine months ended September 30, 2024, the cost of products and operating expenses were as follows:
| Expense Type | Three Months Ended September 30, 2024 | Nine Months Ended September 30, 2024 |
|---|---|---|
| Cost of Products | $471 million | $1,400 million |
| Warehousing, Selling and Administrative Expenses | $107 million | $313 million |
| Impairment and Other Charges | $5 million | $5 million |
Cash Flow and Liquidity
For the nine months ended September 30, 2024, the cash flow performance was as follows:
| Cash Flow Activity | 2024 | 2023 |
|---|---|---|
| Net Cash Provided by Operating Activities | $176 million | $83 million |
| Net Cash Used in Investing Activities | $(190) million | $(47) million |
| Net Cash Used in Financing Activities | $(25) million | $(54) million |
Market Conditions and Outlook
The performance of NOW Inc. is closely tied to commodity prices and drilling activity. As of October 25, 2024, the U.S. rig count was 585, stable compared to the previous quarter. The price of West Texas Intermediate Crude was $72.02 per barrel, down 5.5% from the third quarter average.
Tax and Regulatory Environment
The effective tax rates for DNOW for the three and nine months ended September 30, 2024, were 40.9% and 29.8%, respectively, compared to 5.4% and 5.6% for the same periods in 2023. This increase was primarily due to foreign currency translation losses and restructuring charges.
How NOW Inc. (DNOW) Makes Money
Revenue Streams
NOW Inc. (DNOW) generates revenue primarily through the distribution of energy and industrial products across various segments, including the United States, Canada, and international markets. For the three and nine months ended September 30, 2024, the company reported total revenue of $606 million and $1,802 million, respectively, showing an increase of 3.1% and 2.0% compared to the same periods in 2023.
| Segment | Q3 2024 Revenue (in millions) | Q3 2023 Revenue (in millions) | 9M 2024 Revenue (in millions) | 9M 2023 Revenue (in millions) |
|---|---|---|---|---|
| United States | $482 | $448 | $1,429 | $1,331 |
| Canada | $65 | $68 | $187 | $217 |
| International | $59 | $72 | $186 | $218 |
| Total Revenue | $606 | $588 | $1,802 | $1,766 |
Operating Profit
For the three months ended September 30, 2024, the operating profit was $23 million, down from $37 million in the previous year. For the nine months, the operating profit was $84 million, compared to $108 million in 2023.
| Segment | Q3 2024 Operating Profit (in millions) | Q3 2023 Operating Profit (in millions) | 9M 2024 Operating Profit (in millions) | 9M 2023 Operating Profit (in millions) |
|---|---|---|---|---|
| United States | $25 | $29 | $76 | $81 |
| Canada | $3 | $6 | $8 | $17 |
| International | $(5) | $2 | $0 | $10 |
| Total Operating Profit | $23 | $37 | $84 | $108 |
Cost Structure
For the three months ended September 30, 2024, the cost of products was $471 million, compared to $454 million in the same period of 2023. This increase is attributed to higher revenues.
Net Income
Net income attributable to NOW Inc. for the three months ended September 30, 2024, was $13 million, a decrease from $35 million in the same quarter of 2023. For the nine months, net income was $58 million compared to $100 million in 2023.
| Period | Net Income (in millions) |
|---|---|
| Q3 2024 | $13 |
| Q3 2023 | $35 |
| 9M 2024 | $58 |
| 9M 2023 | $100 |
Cash Flow
For the nine months ended September 30, 2024, net cash provided by operating activities was $176 million, compared to $83 million in the corresponding period of 2023.
| Cash Flow Activities | 9M 2024 (in millions) | 9M 2023 (in millions) |
|---|---|---|
| Operating Activities | $176 | $83 |
| Investing Activities | $(190) | $(47) |
| Financing Activities | $(25) | $(54) |
Market Position and Strategy
NOW Inc. is positioned as a global distributor of energy products, with operations across approximately 80 countries. The company aims to leverage its DigitalNOW® platform to enhance its e-commerce capabilities and optimize supply chain management.
Acquisition Impact
The increase in revenue for the U.S. segment for the three and nine months ended September 30, 2024, was largely driven by incremental revenue from an acquisition completed in the first quarter of 2024.
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Resources:
- NOW Inc. (DNOW) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of NOW Inc. (DNOW)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View NOW Inc. (DNOW)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.