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National Oilwell (NOV) Earnings and Sales Miss Mark in Q1
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National Oilwell Varco, Inc. (NOV - Free Report) reported first-quarter 2018 adjusted loss of 18 cents per share, much wider than the Zacks Consensus Estimate of a loss of 4 cents. Lower contribution from all segments led to the poor show. Operating profit from the Rig Technologies segment totaled $18 million, way below the Zacks Consensus Estimate of $34.81 million. Further, operating profit from the Completion & Production Solutions segment was $16 million, lagging the estimate of $26.55 million. Operating profit of $12 million at Wellbore Technologies also fell shy of the Zacks Consensus Estimate of $18.88 million.
The bottom line also compared unfavorably with the last report’s loss of 4 cents. On the bright side, loss per share narrowed 43.7% from the first quarter of 2017. The year-over-year improvement was led by robust performance by the onshore-levered Wellbore Technologies segment.
Total revenues of $1,795 million missed the Zacks Consensus Estimate of $1,853 million. Revenues also declined 8.8% sequentially. However, the top line improved nominally from the year-ago $1,741 million.
National Oilwell Varco, Inc. Price, Consensus and EPS Surprise
Rig Technologies: Revenues came in at $483 million compared with $582 million in the year-ago quarter, reflecting a decline of 17%. Revenues at the segment also declined 21.3% sequentially. Slowdown in new offshore rig construction led to the weak performance.
The unit’s adjusted EBITDA was $45 million, slightly lower than $47 million recorded in the year-ago quarter. The segment’s EBITDA fell 35.7% sequentially, affected by low orders.
Wellbore Technologies: The segment’s revenues rose 28.1% year over year to $711 million. Strong demand from greater market adoption of the unit’s superior technology services drove revenues. However, revenues showed a marginal drop from $715 million recorded in the prior quarter owing to reduced activities in the Eastern Hemisphere, partly offset by robust growth in the Western Hemisphere.
Importantly, the unit improved significantly from last year’s adjusted EBITDA of $38 million to $103 million on the back of higher volumes and pricing gains. However, the figure was lower than the prior-quarter’s $107 million.
Completion & Production Solutions: Revenues at the segment were $670 million, up from $648 million in the year-ago quarter. However, the top line was lower than $690 million in the last report due to client associated equipment deferrals.
The unit recorded adjusted EBITDA of $73 million, down from $77 million and $74 million in the year-ago quarter and prior quarter, respectively.
Backlog
Capital equipment order backlog for Rig Technologies was $2,050 million as of Mar 31, 2018, including $201 million worth of new orders.
Moreover, the Completion & Production Solutions segment reported a backlog of $1,010 million in capital equipment order at the end of the first quarter. The figure included $324 million of new orders.
Balance Sheet
As of Mar 31, 2018, the company had cash and cash equivalents of $1,236 million and long-term debt of $2,707 million. The debt-to-capitalization ratio was around 16.1%.
Exterran is expected to witness a year-over-year increase of 251.28% in 2018 earnings.
Forum Energy is likely to see a year-over-year increase of 105.26% in 2018 earnings.
McDermott delivered an average positive earnings surprise of 73.63% in the trailing four quarters.
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National Oilwell (NOV) Earnings and Sales Miss Mark in Q1
National Oilwell Varco, Inc. (NOV - Free Report) reported first-quarter 2018 adjusted loss of 18 cents per share, much wider than the Zacks Consensus Estimate of a loss of 4 cents. Lower contribution from all segments led to the poor show. Operating profit from the Rig Technologies segment totaled $18 million, way below the Zacks Consensus Estimate of $34.81 million. Further, operating profit from the Completion & Production Solutions segment was $16 million, lagging the estimate of $26.55 million. Operating profit of $12 million at Wellbore Technologies also fell shy of the Zacks Consensus Estimate of $18.88 million.
The bottom line also compared unfavorably with the last report’s loss of 4 cents. On the bright side, loss per share narrowed 43.7% from the first quarter of 2017. The year-over-year improvement was led by robust performance by the onshore-levered Wellbore Technologies segment.
Total revenues of $1,795 million missed the Zacks Consensus Estimate of $1,853 million. Revenues also declined 8.8% sequentially. However, the top line improved nominally from the year-ago $1,741 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 Technologies: Revenues came in at $483 million compared with $582 million in the year-ago quarter, reflecting a decline of 17%. Revenues at the segment also declined 21.3% sequentially. Slowdown in new offshore rig construction led to the weak performance.
The unit’s adjusted EBITDA was $45 million, slightly lower than $47 million recorded in the year-ago quarter. The segment’s EBITDA fell 35.7% sequentially, affected by low orders.
Wellbore Technologies: The segment’s revenues rose 28.1% year over year to $711 million. Strong demand from greater market adoption of the unit’s superior technology services drove revenues. However, revenues showed a marginal drop from $715 million recorded in the prior quarter owing to reduced activities in the Eastern Hemisphere, partly offset by robust growth in the Western Hemisphere.
Importantly, the unit improved significantly from last year’s adjusted EBITDA of $38 million to $103 million on the back of higher volumes and pricing gains. However, the figure was lower than the prior-quarter’s $107 million.
Completion & Production Solutions: Revenues at the segment were $670 million, up from $648 million in the year-ago quarter. However, the top line was lower than $690 million in the last report due to client associated equipment deferrals.
The unit recorded adjusted EBITDA of $73 million, down from $77 million and $74 million in the year-ago quarter and prior quarter, respectively.
Backlog
Capital equipment order backlog for Rig Technologies was $2,050 million as of Mar 31, 2018, including $201 million worth of new orders.
Moreover, the Completion & Production Solutions segment reported a backlog of $1,010 million in capital equipment order at the end of the first quarter. The figure included $324 million of new orders.
Balance Sheet
As of Mar 31, 2018, the company had cash and cash equivalents of $1,236 million and long-term debt of $2,707 million. The debt-to-capitalization ratio was around 16.1%.
Zacks Rank and Key Picks
National Oilwell carries a Zacks Rank #3 (Hold).
A few better-ranked players in the same industry are Exterran Corporation , Forum Energy Technologies, Inc. (FET - Free Report) and McDermott International, Inc. , each carrying a Zacks Rank #2 (Buy). You can see You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Exterran is expected to witness a year-over-year increase of 251.28% in 2018 earnings.
Forum Energy is likely to see a year-over-year increase of 105.26% in 2018 earnings.
McDermott delivered an average positive earnings surprise of 73.63% in the trailing four quarters.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>