DNOW (NYSE:DNOW) Releases Earnings Results, Beats Expectations By $0.03 EPS

DNOW (NYSE:DNOW) announced its quarterly earnings results on Thursday. The oil and gas company reported $0.12 earnings per share for the quarter, beating the consensus estimate of $0.09 by $0.03, FiscalAI reports. The firm had revenue of $1.31 billion during the quarter, compared to analyst estimates of $1.27 billion. DNOW had a positive return on equity of 3.91% and a negative net margin of 4.58%.DNOW’s revenue for the quarter was up 108.1% compared to the same quarter last year. During the same quarter in the previous year, the business earned $0.27 EPS.

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 Price Performance

DNOW stock traded up $1.13 during midday trading on Friday, reaching $16.52. The company had a trading volume of 4,134,245 shares, compared to its average volume of 2,340,680. The company has a debt-to-equity ratio of 0.23, a current ratio of 2.14 and a quick ratio of 1.14. DNOW has a 12-month low of $10.94 and a 12-month high of $17.26. The company has a market capitalization of $3.02 billion, a P/E ratio of -15.44 and a beta of 0.82. The firm’s fifty day simple moving average is $13.62 and its 200-day simple moving average is $13.34.

Trending Headlines about DNOW

Here are the key news stories impacting DNOW this week:

• Positive Sentiment: Quarterly results exceeded expectations: Q2 revenue rose 108% year over year to $1.307 billion, ahead of the approximately $1.27 billion consensus estimate. Adjusted EPS was $0.12, beating forecasts ranging from $0.08 to $0.09, although the company reported a GAAP net loss of $21 million, or $0.11 per share. DNOW Beats Q2 Earnings and Revenue Estimates
• Positive Sentiment: Operating momentum improved: Revenue increased 10% sequentially, U.S. revenue grew 13%, and adjusted EBITDA climbed 54% sequentially to $60 million as integration and cost-management efforts advanced. Management also said U.S. midstream revenue exceeded a $1 billion annualized rate for the first time. DNOW Reports Second Quarter 2026 Results
• Positive Sentiment: Cash flow and capital returns strengthened: Operating cash flow reached a record $133 million, while DNOW repurchased $25 million of stock during the quarter and $75 million year to date under its $160 million authorization. Net debt leverage improved to 1.7 times. DNOW Reports Strong Second Quarter Results
• Positive Sentiment: Analyst sentiment improved: Susquehanna raised its price target from $16 to $19 and upgraded DNOW to “positive,” citing the company’s stronger sales and raised 2026 revenue and cash-flow outlook. Benzinga Analyst Update
• Neutral Sentiment: Profitability remains mixed: Reported gross margin was 18.6%, below 20.5% a year earlier, and adjusted EBITDA represented 4.6% of revenue. Investors may continue to monitor whether the higher sales volume translates into sustainable GAAP profitability.
• Negative Sentiment: Legal overhang persists: Rosen Law Firm and Bronstein, Gewirtz & Grossman announced securities class actions alleging investor harm related to DNOW’s 2025 special meeting disclosures. The developments could create litigation costs and reputational risk, although they have not offset the positive earnings reaction. DNOW Securities Class Action

Hedge Funds Weigh In On DNOW

A number of hedge funds have recently made changes to their positions in the company. Quarry LP boosted its stake in shares of DNOW by 712.6% in the fourth quarter. Quarry LP now owns 1,942 shares of the oil and gas company’s stock worth $26,000 after acquiring an additional 1,703 shares during the last quarter. EverSource Wealth Advisors LLC boosted its stake in DNOW by 190.5% during the 2nd quarter. EverSource Wealth Advisors LLC now owns 2,423 shares of the oil and gas company’s stock worth $36,000 after purchasing an additional 1,589 shares during the last quarter. Arax Advisory Partners boosted its stake in DNOW by 336.3% during the 4th quarter. Arax Advisory Partners now owns 2,797 shares of the oil and gas company’s stock worth $37,000 after purchasing an additional 2,156 shares during the last quarter. Kemnay Advisory Services Inc. purchased a new stake in shares of DNOW during the fourth quarter worth $46,000. Finally, Quadrant Capital Group LLC grew its holdings in shares of DNOW by 266.4% during the fourth quarter. Quadrant Capital Group LLC now owns 3,620 shares of the oil and gas company’s stock worth $48,000 after buying an additional 2,632 shares in the last quarter. Institutional investors and hedge funds own 97.63% of the company’s stock.

Analyst Ratings Changes

A number of brokerages have issued reports on DNOW. Zacks Research upgraded DNOW from a “strong sell” rating to a “hold” rating in a research report on Friday, May 22nd. Susquehanna upped their target price on DNOW from $16.00 to $19.00 and gave the stock a “positive” rating in a research note on Friday. Wall Street Zen lowered 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 report on Wednesday, May 27th. Finally, Freedom Capital raised shares of DNOW to a “strong-buy” rating in a research note on Monday, June 22nd. One research analyst has rated the stock with a Strong Buy rating, three have assigned a Buy rating, one has issued a Hold rating and one has assigned a Sell rating to the company’s stock. According to MarketBeat.com, the stock currently has an average rating of “Moderate Buy” and an average price target of $17.75.

About DNOW

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.