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National Oilwell (NOV) Q2 Loss in Line, Revenues Miss Mark
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Energy equipment maker National Oilwell Varco Inc. (NOV - Free Report) reported second-quarter 2017 loss per share (excluding one-time items) of 14 cents which was in line with the Zacks Consensus Estimate. However, the bottom line compared favorably with the year-ago quarter adjusted loss of 30 cents.
Aggressive cost cutting-initiatives and improved efficiencies along with an uptick of activities in the North American land market led to better results
Second-quarter revenues of $1,759 million increased from $1,724 million a year ago but narrowly missed the Zacks Consensus Estimate of $1,760 million.
National Oilwell Varco, Inc. Price, Consensus and EPS Surprise
Rig Systems: Revenues came in at $346 million, down 39% from the year-ago quarter. Moreover, the unit incurred an operating loss of $7 million as against a profit of $7 million in the year ago quarter. Declining backlog and suspension of capital equipment deliveries to the third quarter dampened results, which were partly offset by cost cuts.
Rig Aftermarket: The segment generated revenues of $341 million, down 6.3% from the year-ago period. However, operating profit increased 22.5% from the second quarter of 2016 to $76 million. Increased focus on efficiency and favorable mix of products drove the operating margin.
Wellbore Technologies: The segment’s revenues were up 20.2% year over year to $614 million. Further, the unit’s operating loss narrowed by 83.5% to $24 million during second-quarter 2017. Rising momentum in the U.S. markets and modest improvement in international markets along with increased consumer demand for the segment’s products/services led to the improved results.
Completion & Production Solutions: Revenues for the segment were recorded at $652 million, up 21.2% from $538 million in the year-ago quarter. The unit recorded operating profit of $27 million, turning around from an operating loss of $33 million in the corresponding period last year. Improvements in the segment’s land-oriented operations resulted in increased revenues. Strong execution of projects and cost containment efforts led to the operating profit.
Costs & Expenses
Adjusted selling, general, and administrative expenses declined to $293 million (or 4%) in the quarter from the year-ago period figure of $305 million.
Backlog
Capital equipment orders’ backlog for Rig Systems was $2.22 billion as of Jun 30, 2017, including $124 million in new orders during the second quarter.
Moreover, Completion & Production Solutions segment reported a backlog of $881 million in capital equipment order at the end of the second quarter. The figure included $501 million in new orders.
Balance Sheet
As of Jun 30, the company had cash and cash equivalents of $1,530 million and long-term debt of $2,708 million. The debt-to-capitalization ratio was approximately 16.2%.
Zacks Rank & Key Picks
Houston, TX-based National Oilwell is a world leader in the designing, manufacturing and selling of comprehensive systems, components, products, and equipment used in oil and gas drilling and production worldwide. The company carries a Zacks Rank #4 (Sell).
Braskem reported an average positive earnings surprise of 107.79% in the trailing four quarters.
Petrobras delivered an average positive earnings surprise of 59.58% in the last four quarters.
SeaDrill reported an average positive earnings surprise of 97.13% in the last four quarters.
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National Oilwell (NOV) Q2 Loss in Line, Revenues Miss Mark
Energy equipment maker National Oilwell Varco Inc. (NOV - Free Report) reported second-quarter 2017 loss per share (excluding one-time items) of 14 cents which was in line with the Zacks Consensus Estimate. However, the bottom line compared favorably with the year-ago quarter adjusted loss of 30 cents.
Aggressive cost cutting-initiatives and improved efficiencies along with an uptick of activities in the North American land market led to better results
Second-quarter revenues of $1,759 million increased from $1,724 million a year ago but narrowly missed the Zacks Consensus Estimate of $1,760 million.
National Oilwell Varco, Inc. Price, Consensus and EPS Surprise
National Oilwell Varco, Inc. Price, Consensus and EPS Surprise | National Oilwell Varco, Inc. Quote
Segmental Performance
Rig Systems: Revenues came in at $346 million, down 39% from the year-ago quarter. Moreover, the unit incurred an operating loss of $7 million as against a profit of $7 million in the year ago quarter. Declining backlog and suspension of capital equipment deliveries to the third quarter dampened results, which were partly offset by cost cuts.
Rig Aftermarket: The segment generated revenues of $341 million, down 6.3% from the year-ago period. However, operating profit increased 22.5% from the second quarter of 2016 to $76 million. Increased focus on efficiency and favorable mix of products drove the operating margin.
Wellbore Technologies: The segment’s revenues were up 20.2% year over year to $614 million. Further, the unit’s operating loss narrowed by 83.5% to $24 million during second-quarter 2017. Rising momentum in the U.S. markets and modest improvement in international markets along with increased consumer demand for the segment’s products/services led to the improved results.
Completion & Production Solutions: Revenues for the segment were recorded at $652 million, up 21.2% from $538 million in the year-ago quarter. The unit recorded operating profit of $27 million, turning around from an operating loss of $33 million in the corresponding period last year. Improvements in the segment’s land-oriented operations resulted in increased revenues. Strong execution of projects and cost containment efforts led to the operating profit.
Costs & Expenses
Adjusted selling, general, and administrative expenses declined to $293 million (or 4%) in the quarter from the year-ago period figure of $305 million.
Backlog
Capital equipment orders’ backlog for Rig Systems was $2.22 billion as of Jun 30, 2017, including $124 million in new orders during the second quarter.
Moreover, Completion & Production Solutions segment reported a backlog of $881 million in capital equipment order at the end of the second quarter. The figure included $501 million in new orders.
Balance Sheet
As of Jun 30, the company had cash and cash equivalents of $1,530 million and long-term debt of $2,708 million. The debt-to-capitalization ratio was approximately 16.2%.
Zacks Rank & Key Picks
Houston, TX-based National Oilwell is a world leader in the designing, manufacturing and selling of comprehensive systems, components, products, and equipment used in oil and gas drilling and production worldwide. The company carries a Zacks Rank #4 (Sell).
Some better-ranked players from the broader energy space include Braskem S.A. (BAK - Free Report) , Petróleo Brasileiro S.A. or Petrobras (PBR - Free Report) and SeaDrill Limited (SDRL - Free Report) . While Braskem and Petrobras sport a Zacks Rank #1 (Strong Buy), SeaDrill carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Braskem reported an average positive earnings surprise of 107.79% in the trailing four quarters.
Petrobras delivered an average positive earnings surprise of 59.58% in the last four quarters.
SeaDrill reported an average positive earnings surprise of 97.13% in the last four quarters.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early. See Zacks' 3 Best Stocks to Play This Trend >>