It has been about a month since the last earnings report for Nov Inc. (NOV Quick QuoteNOV - Free Report) . Shares have lost about 3.7% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Nov Inc. due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

NOV Reports Q2 Loss Narrower Than Expected

NOV reported adjusted loss of 4 cents per share for second-quarter 2021, narrower than the Zacks Consensus Estimate of a loss of 13 cents and the year-ago quarter’s loss of 7 cents. This upside could be attributed to better-than-expected sales from the Rig Technologies and the Wellbore Technologies segments.

Total revenues of $1.42 billion outpaced the Zacks Consensus Estimate by 3.42%. However, the top line dipped 5.3% from the year-ago number of $1.5 billion due to weakness in the Completion & Production Solutions units as a result of operational troubles from coronavirus-induced restrictions.

Segmental Performance

Rig Technologies:  Revenues summed $487 million, which surpassed the Zacks Consensus Estimate of $433 million and compared favorably with the year-ago quarter’s $476 million owing to the inclusion of $74 million associated with the final settlement stemming from the cancellation of offshore rig contracts. The unit’s adjusted EBITDA of $75 million outpaced the Zacks Consensus Estimate of $13.69 million and increased from the year-earlier quarter’s $14 million.

Wellbore Technologies:  Segmental revenues of $463 million outpaced the Zacks Consensus Estimate of $451 million and compared favorably with the year-ago quarter’s $442 million on the back of increased North American activity levels and a marginal progress in the international markets. The unit’s adjusted EBITDA of $63 million surpassed the Zacks Consensus Estimate of $52 million and exceeded the year-earlier quarter’s $42 million.

Completion & Production Solutions:  Revenues of $497 million missed the Zacks Consensus Estimate of $531 million and also dropped 19% from $611 million in the year-earlier quarter. This downside could be attributed to coronavirus-triggered constraints. The unit recorded adjusted EBITDA of $4 million, missing the Zacks Consensus Estimate of $18.66 million and declining from the year-ago quarter’s figure of $68 million.

Backlog

Capital equipment order backlog for Rig Technologies was $2.66 billion as of Jun 30, 2021 including $232 million worth of new orders.

The Completion & Production Solutions’ backlog for capital equipment orders totalled $1 billion at the end of the second quarter comprising $462 million of new orders.

Balance Sheet

As of Jun 30, 2021, the company had cash and cash equivalents of $1.6 billion and a long-term debt of $1.69 billion. The total debt-to-total capitalization was 24.6%. The company has $2 billion available under its revolving credit facility.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates review. The consensus estimate has shifted -19.91% due to these changes.

VGM Scores

At this time, Nov Inc. has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Nov Inc. has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.