Earnings to watch: Valaris (VAL) reports Q3 results tomorrow

What happened

Valaris, an offshore drilling contractor, reports third-quarter results Monday after the market closes. Last quarter it beat analysts' revenue expectations with $539.2 million, down 12.4% year on year, and beat earnings-per-share estimates. This quarter, the market expects revenue to decline 3.7% year on year.

Confirmed

Global impact / market context

Valaris earns money by renting drilling rigs to oil and gas producers. Falling expected revenue means less money coming in, which can pressure cash available and limit capital spending on rig upkeep or upgrades. Because analysts kept their estimates steady, the results will show whether the business is stabilizing.

Analyst inference

Among Valaris's oilfield services peers, ProPetro reported 20.9% year-on-year revenue growth, beating estimates by 14.1%, while NOV reported revenue up 2.3%, topping estimates by 1.5%. Their results give a hint at what to expect from Valaris's own third-quarter report, which follows the same reporting period.

Analyst inference

What to watch

1. Watch whether Valaris revenue falls more or less than the 3.7% decline the market expects, compared with last quarter's 12.4% drop. Confirmed
2. Check whether Valaris again beats analysts' profit-per-share estimates, as it did last quarter, since beats have historically supported the stock. Proposed
3. Compare Valaris results with ProPetro's and NOV's reports to judge whether weakness is company-specific or affects the wider oilfield services industry. Analyst inference

Evidence

• stockstory.org