Fri. Nov 15th, 2019

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Stocks Alerts: National Oilwell Varco, Inc. (NYSE: NOV)

3 min read

National Oilwell Varco, Inc. (NYSE: NOV) newly stated 3rd-quarter 2k19 revenues of $2.130B, a contrast to $2.130B for the 2nd-quarter of 2k19 and $2.150B for the 3rd-quarter of 2k18. Net loss for the 3rd-quarter of 2k19 was $244.00M, which included non-cash, pre-tax charges (“other items”, see Other Corporate Items for additional detail) of $314.00M. Adjusted EBITDA (operating profit apart from depreciation, amortization, and other items) increased $67.00M sequentially to $262.00M, or 12.30 percent of sales.

“In the 3rd-quarter, adjusted EBITDA improved significantly relative to 2nd-quarter results because of accelerating cost reductions, a favorable revenue shift towards higher-margin offshore and aftermarket businesses, and positive project close-out variances,” commented Clay Williams, Chairman, President, and CEO. “While 3rd-quarter revenue was essentially flat with the previous quarter, margins improved as sales growth in international and offshore markets assisted offset sequential declines from North American operations where our customers are reducing their spending.”

“We were also happy to see NOV post its strongest cash flow quarter in more than three years, as our concerted efforts to more efficiently manage working capital are making an impact. Overall, NOV’s unique planned position within oil and gas, counting its broad geographic and product diversity, it’s market leadership, and its large installed base, contributed to its improving results in the 3rd-quarter. As our industry battles deep cyclicality and divergent market conditions, the Company remains committed to improving its financial returns while also assisting our customers to improve the efficiency, environmental performance, and safety of their operations.”

Wellbore Technologies

Wellbore Technologies generated revenues of $793.00M in the 3rd-quarter of 2k19, a decline of seven percent from the 2nd-quarter of 2k19 and a decline of six percent from the 3rd-quarter of 2k18. Softening demand for the segment’s short-cycle products and services in a contracting North American market, coupled with reduced drill pipe deliveries, drove the sequential revenue decline. Operating profit was $42.00M and included $41.00M of other items. Adjusted EBITDA was $133.00M, or 16.80 percent of sales, as the benefits of the segment’s cost-savings programs assisted limit decremental leverage (the change in adjusted EBITDA divided by the change in revenue) to 2.0 percent.

Completion & Production Solutions

Completion & Production Solutions generated revenues of $728.00M in the 3rd-quarter of 2k19, a boost of 10.00 percent from the 2nd-quarter of 2k19 and a decline of one percent from the 3rd-quarter of 2k18. The 2nd-straight quarter of double-digit top-line improvement was driven by increased shipments of fiberglass pipe, processing equipment, and subsea flexible pipe, predominantly for international and offshore markets. Operating loss was $24.00M and included $79.00M in other items. Adjusted EBITDA increased 58.00 percent sequentially to $82.00M, or 11.30 percent of sales, as realized cost-cutting benefits were boosted by favorable project closures and improved absorption in eastern hemisphere facilities. Sequential Adjusted EBITDA leverage was 46.00 percent.

New orders booked throughout the quarter totaled $535.00M, representing a book-to-bill of 124.00 percent when contrast to the $431.00M of orders shipped from the backlog. On September 30, 2k19, the backlog for capital equipment orders for Completion & Production Solutions was $1.300B.

Rig Technologies

Rig Technologies generated revenues of $649.00M in the 3rd-quarter of 2k19, a decline of 3.0 percent from the 2nd-quarter of 2k19 and a boost of 2.0 percent from the 3rd-quarter of 2k18. Incremental contributions from the segment’s Aftermarket business, which continues to benefit from improved offshore rig tendering activity, were more than offset by a decline in capital equipment sales into the North American land market throughout the quarter. Operating loss was $110.00M and included $194.00M of other items. Adjusted EBITDA increased 42.00 percent sequentially to $105.00M, or 16.20 percent of sales, benefiting from positive project closeout variances, a more favorable shift in product mix, and strong progress on cost savings programs.

New orders booked throughout the quarter totaled $221.00M, representing a book-to-bill of 90.00 percent when contrast to the $246.00M of orders shipped from the backlog. On September 30, 2k19, the backlog for capital equipment orders for Rig Technologies was $3.140B.

Other Corporate Items

Throughout the 3rd-quarter, the Company recognized $314.00M in restructuring charges, mainly because of inventory reserves and severance accruals. See reconciliation of Adjusted EBITDA to Net Income.

As of September 30, 2k19, the Company had total debt of $2.480B, with $3.00B available on its revolving credit facility, and $1.310B in cash and cash equivalents.

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