DNOW Inc. officials on Friday said that a slow start to the year led to declines in sales, profit and earnings in its first-quarter financial results.
But the Houston energy and industrial product distributor — no. 14 on ID’s 2023 Big 50 list — indicated that it now anticipates stronger sales growth for all of 2024 amid expectations of “increased market activity” beginning in the current quarter.
DNOW reported quarterly sales of $563 million in the January-March window, a 3.6% decline from the $584 million in revenue in the same period last year.
The company’s operating profit fell from $35 million to $28 million over that span, while net income slipped from $32 million to $21 million — translating to diluted earnings that dropped from $0.28 per share to $0.19 per share year-over-year.
The company’s U.S. sales actually increased during the quarter — from $427 million last year up to $435 million — but declines in Canada and its international markets led to the overall revenue drop.
DNOW President and CEO David Cherechinsky noted that the company completed its acquisition of Whitco Supply — one of its largest to date — yet still ended the quarter debt-free. The company also saw “strong free cash flow” that could lead DNOW to easily exceed its target for the full year.
He blamed the slow start to the quarter on “historically low” natural gas prices and lower well completions in the U.S., but said sales in the second quarter should rise by 10% to 15% over Q1 levels assuming improved market activity.
Cherechinsky said the company now expects full-year growth in “the mid-to-high single digit percentage range.”
“I am incredibly pleased with the progress we made this quarter,” he said in the company’s earnings statement.
