International Markets and DNOW (DNOW): A Deep Dive for Investors
Have you looked into how DNOW (DNOW) performed internationally during the quarter ending December 2024? Considering the widespread global presence of this energy and industrial distribution company, examining the trends in international revenues is essential for assessing its financial resilience and prospects for growth.
In the current global economy, which is more interconnected than ever, a company's success in penetrating international markets is crucial for its financial health and growth journey. Investors must understand a company's dependence on overseas markets, as this offers a window into the company's earnings stability, its ability to benefit from varied economic cycles and its potential for long-term growth.
Being present in foreign markets serves as protection against local economic declines and helps benefit from more rapidly expanding economies. Yet, such expansion also introduces challenges related to currency fluctuations, geopolitical uncertainties and varied market behaviors.
Our review of DNOW's last quarterly performance uncovered some notable trends in the revenue contributions from its international markets, which are commonly analyzed and tracked by Wall Street experts.
The recent quarter saw the company's total revenue reaching $571 million, marking an improvement of 2.9% from the prior-year quarter. Next, we'll examine the breakdown of DNOW's revenue from abroad to comprehend the significance of its international presence.
A Dive into DNOW's International Revenue Trends
Canada accounted for 11.56% of the company's total revenue during the quarter, translating to $66 million. Revenues from this region represented a surprise of +7.67%, with Wall Street analysts collectively expecting $61.3 million. When compared to the preceding quarter and the same quarter in the previous year, Canada contributed $65 million (10.73%) and $65 million (11.71%) to the total revenue, respectively.
During the quarter, International contributed $54 million in revenue, making up 9.46% of the total revenue. When compared to the consensus estimate of $63.6 million, this meant a surprise of -15.09%. Looking back, International contributed $59 million, or 9.74%, in the previous quarter, and $72 million, or 12.97%, in the same quarter of the previous year.
International Market Revenue Projections
For the current fiscal quarter, it is anticipated by Wall Street analysts that DNOW will report a total revenue of $583.5 million, which reflects an increase of 3.6% from the same quarter in the previous year. The revenue contributions are expected to be 11% from Canada ($64.2 million) and 9.7% from International ($56.6 million).
Analysts expect the company to report a total annual revenue of $2.48 billion for the full year, marking an increase of 4.6% compared to last year. The expected revenue contributions from Canada and International are projected to be 10.1% ($250.9 million) and 9.4% ($234.2 million) of the total revenue, in that order.
Key Takeaways
DNOW's leaning on foreign markets for its revenue stream presents a mix of chances and challenges. Therefore, a vigilant watch on its international revenue movements can greatly aid in projecting the company's future direction.
In an era of growing international interdependencies and escalating geopolitical disputes, Wall Street analysts are vigilant in tracking these trends for businesses with a global reach, in order to refine their predictions of earnings. It should be noted, however, that a multitude of other elements, such as a company's domestic position, also play a significant role in shaping the earnings forecasts.
At Zacks, a company's changing earnings outlook is given considerable attention due to its proven, strong influence on a stock's price performance in the near term. The connection here is straightforward and positive: when earnings estimates are revised upward, the stock price generally follows suit, increasing as well.
The Zacks Rank, our proprietary stock rating tool, comes with an externally validated impressive track record. It effectively utilizes shifts in earnings projections to act as a dependable barometer for forecasting short-term stock price trends.
DNOW currently has a Zacks Rank #1 (Strong Buy), indicating that it could outperform the broader market in the near term. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
DNOW's Recent Stock Market Performance
Over the past month, the stock has gained 25.2% versus the Zacks S&P 500 composite's 4.7% increase. The Zacks Industrial Products sector, of which DNOW is a part, has declined 1.6% over the same period. The company's shares have increased 14.9% over the past three months compared to the S&P 500's 3.1% increase. Over the same period, the sector has declined 3.1%.
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