DNOW (NYSE:DNOW) Posts Earnings Results, Beats Estimates By $0.03 EPS

DNOW (NYSE:DNOW) posted its quarterly earnings results on Thursday. The oil and gas company reported $0.12 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $0.09 by $0.03, FiscalAI reports. DNOW had a negative net margin of 4.14% and a positive return on equity of 4.94%. The business had revenue of $1.31 billion during the quarter, compared to analyst estimates of $1.27 billion. During the same period in the prior year, the firm earned $0.27 earnings per share. The firm’s revenue was up 108.1% compared to the same quarter last year.

Here are the key takeaways from DNOW’s conference call:

• Second-quarter results exceeded expectations, with revenue rising 10% sequentially to $1.3 billion and adjusted EBITDA increasing 54% to $60 million, or 4.6% of revenue.
• Cash generation and working capital improved substantially, including a record $133 million of operating cash flow, a seven-day reduction in DSO, and a $131 million decline in inventory. Management expects an additional $25 million–$50 million inventory reduction during the rest of the year.
• U.S. growth was led by midstream, gas utilities, and upstream, while midstream revenue surpassed a $1 billion annualized run rate and gas utilities revenue reached an 11-quarter high. Data centers, LNG, water solutions, and infrastructure projects were identified as attractive growth opportunities.
• Management raised its full-year outlook to approximately $5.0 billion–$5.1 billion of revenue and EBITDA margin approaching 4.5%; third-quarter revenue is expected to grow at a low- to mid-single-digit sequential rate. The company also expects 2026 exit-rate cost synergies of about $30 million, above its original $17 million target.
• Integration and ERP-related costs remain a near-term headwind, while adjusted gross margin declined to 20.8% due partly to $4 million of aged-inventory charges and lower international vendor consideration. Downstream activity remains mixed, Canada was pressured by seasonal breakup, and Middle East project timing continues to be affected by geopolitical uncertainty.

DNOW Stock Performance

Shares of DNOW stock traded up $1.32 during trading hours on Thursday, reaching $15.54. 6,345,177 shares of the company’s stock were exchanged, compared to its average volume of 2,096,685. DNOW has a fifty-two week low of $10.94 and a fifty-two week high of $17.26. The company has a quick ratio of 1.14, a current ratio of 2.42 and a debt-to-equity ratio of 0.27. The stock has a market capitalization of $2.84 billion, a P/E ratio of -21.29 and a beta of 0.82. The business has a fifty day moving average price of $13.55 and a 200-day moving average price of $13.32.

DNOW News Roundup

Here are the key news stories impacting DNOW this week:

• Positive Sentiment: Quarterly results exceeded expectations. DNOW reported revenue of $1.307 billion versus the $1.27 billion analyst estimate, while adjusted EPS of $0.12 surpassed the $0.08–$0.09 consensus range. Revenue rose 10% sequentially and 108.1% year over year, helped by stronger U.S. activity. DNOW Reports Second Quarter 2026 Results
• Positive Sentiment: Cash flow and operating performance improved. Operating cash flow reached a record $133 million, adjusted EBITDA increased 54% sequentially to $60 million, and net-debt leverage improved to 1.7 times. Management also highlighted record annualized U.S. midstream revenue above $1 billion and stronger sequential growth in gas utility and upstream markets. DNOW Strong Second Quarter Results
• Positive Sentiment: Shareholder returns provided additional support. DNOW repurchased $25 million of stock during the quarter and $75 million year to date under its $160 million authorization, signaling management’s confidence in the company’s cash generation and long-term strategy. DNOW Beats Q2 Estimates
• Neutral Sentiment: Profitability remains mixed. Despite the adjusted profit, DNOW posted a GAAP net loss of $21 million, or $0.11 per diluted share. Gross margin was 18.6%, below 20.5% a year earlier, and adjusted EPS declined from $0.27 in the comparable quarter.
• Negative Sentiment: Legal risk has become more prominent. Rosen Law Firm and Bronstein, Gewirtz & Grossman announced securities class actions alleging DNOW and certain officers violated federal securities laws in connection with the company’s 2025 special meeting. Investors seeking lead-plaintiff status face an October 2, 2026 deadline. The allegations could create legal costs, management distraction and reputational risk, although the claims have not been proven. DNOW Securities Class Action

Institutional Investors Weigh In On DNOW

Institutional investors have recently added to or reduced their stakes in the company. Quarry LP increased its stake in DNOW by 712.6% during the fourth quarter. Quarry LP now owns 1,942 shares of the oil and gas company’s stock valued at $26,000 after acquiring an additional 1,703 shares during the period. EverSource Wealth Advisors LLC raised its holdings in DNOW by 190.5% in the 2nd quarter. EverSource Wealth Advisors LLC now owns 2,423 shares of the oil and gas company’s stock valued at $36,000 after acquiring an additional 1,589 shares in the last quarter. Arax Advisory Partners lifted its position in shares of DNOW by 336.3% in the 4th quarter. Arax Advisory Partners now owns 2,797 shares of the oil and gas company’s stock worth $37,000 after acquiring an additional 2,156 shares during the period. Kemnay Advisory Services Inc. acquired a new stake in shares of DNOW during the 4th quarter worth approximately $46,000. Finally, Quadrant Capital Group LLC grew its holdings in shares of DNOW by 266.4% during the 4th quarter. Quadrant Capital Group LLC now owns 3,620 shares of the oil and gas company’s stock worth $48,000 after purchasing an additional 2,632 shares in the last quarter. 97.63% of the stock is owned by institutional investors and hedge funds.

Wall Street Analysts Forecast Growth

A number of equities research analysts recently issued reports on the stock. Freedom Capital upgraded shares of DNOW to a “strong-buy” rating in a report on Monday, June 22nd. Zacks Research upgraded DNOW from a “strong sell” rating to a “hold” rating in a report on Friday, May 22nd. Wall Street Zen cut DNOW from a “hold” rating to a “sell” rating in a research report on Saturday, May 9th. Weiss Ratings reiterated a “sell (d+)” rating on shares of DNOW in a research note on Wednesday, May 27th. Finally, DA Davidson began coverage on DNOW in a report on Tuesday, June 16th. They set a “buy” rating and a $17.00 price objective on the stock. One analyst has rated the stock with a Strong Buy rating, three have issued a Buy rating, one has given a Hold rating and one has issued a Sell rating to the company. According to MarketBeat, DNOW currently has a consensus rating of “Moderate Buy” and a consensus price target of $17.00.

DNOW Company Profile

DistributionNOW (NYSE: DNOW) is a global distributor of energy and industrial products, serving a broad range of end-markets including oil and gas, petrochemical, power generation, and industrial manufacturing. Headquartered in Houston, Texas, the company provides solutions across the life cycle of energy and industrial assets, with an emphasis on safety, reliability and operational efficiency.

The company’s core product portfolio includes piping systems and related components (such as valves, fittings, flanges and gaskets), instrumentation, electrical and automation equipment, fasteners, industrial safety supplies, chemicals and composite products.