Back to top

Image: Bigstock

NOV Gives Update on Fourth-Quarter 2020 Operational Guidance

Read MoreHide Full Article

NOV Inc. (NOV - Free Report) recently revised its guidance for fourth-quarter 2020. It expects revenues of $1.33 billion and anticipated a GAAP operating loss of $327 million for the December quarter, both below the previously provided projections. Further, adjusted EBITDA is estimated to be $17 million.

Softness in international markets and lower demand for capital equipment offset the ramp-up in North American activity levels that led to higher revenues in the United States for its shorter-cycle businesses. This, in turn, hurt the fourth-quarter performance of its three units, namely Rig Technologies, Wellbore Technologies and Completion & Production Solutions, which fell below the company’s expectations.

The renewed spike in COVID-19 cases forced customers to delay orders, inducing a slowdown in bookings during the latter half of the final quarter. However, NOV managed to attain a sequential uptick of 27% in orders for its Completion & Production Solutions segment and a 105% surge in book-to-bill for its Rig Technologies segment.

Notwithstanding the tough operating landscape of the company's later-cycle business and its continuing investments in developing new products and technologies, a healthy free cash flow was successfully generated, in line with its expectations. .

Clay Williams, NOV’s CEO, chairman and president says, “While we expect continued softness in our first quarter 2021 results, we are optimistic that improving commodity prices, rising activity, and the actions we are taking to position NOV for the future will result in improved profitability over the course of 2021.”

Company Summary

NOV, formerly National Oilwell Varco, is a world leader in designing, manufacturing and selling of comprehensive systems, components, products and equipment used in oil and gas drilling and production worldwide. This Houston, TX-based player rechristened itself since the beginning of this year, which reflects its aim to further expand its scope and scale to enhance economic efficiencies, as well as safety within the energy sector. The company's extensive portfolio of proprietary technologies is intended at lowering the industry's marginal cost per barrel.

The company is set to release fourth-quarter 2020 earnings results on Feb 4, after the market closes. The current Zacks Consensus Estimate is pegged at a loss of 10 cents per share for the to-be-reported quarter while the same for revenues stands at $1.36 billion.

Zacks Rank & Key Picks

NOV currently carries a Zacks Rank #3 (Hold). Some better-ranked players in the energy space are DCP Midstream Partners, LP , Plains Group Holdings, L.P. (PAGP - Free Report) and Altus Midstream Company (ALTM - Free Report) , each presently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Breakout Biotech Stocks with Triple-Digit Profit Potential

The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.

Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.

See these 7 breakthrough stocks now>>


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


NOV Inc. (NOV) - free report >>

Plains Group Holdings, L.P. (PAGP) - free report >>

Arcadium Lithium PLC (ALTM) - free report >>

Published in