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NOV's Stock Barely Moved Since Reporting Wider Loss for Q3

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NOV Inc.’s (NOV - Free Report) stock has shown no substantial movement since third-quarter 2021 earnings announcement on Oct 26. The company’s wider-than-anticipated loss due to lower-than-expected sales from the Rig Technologies and the Completion & Production Solutions segments displeased investors. In fact, the firm’s shares failed to display an uptrend on persistent inflationary pressures and continued supply-chain challenges.

Inside NOV’s Earnings

NOV reported an adjusted loss of 11 cents per share for third-quarter 2021, wider than the Zacks Consensus Estimate of a loss of 8 cents and the year-ago quarter’s loss of 1 cent. This downside could be due to the ongoing logistics challenges and cost inflation. Worse-than-expected sales from the Rig Technologies and the Completion & Production Solutions segments also proved to be headwinds.

Total revenues of $1.34 billion missed the Zacks Consensus Estimate by 5.24%. Moreover, the top line dipped 2.9% from the year-ago number of $1.38 billion.

Segmental Performances

Rig Technologies:  Revenues of $390 million missed the Zacks Consensus Estimate of $420 million and compared unfavorably with the year-ago quarter’s $449 million. This downside was due to the revenue gain made in the second quarter over the third through the receipt of $74 million, which was associated with the final settlement following the cancellation of offshore rig contracts. The unit’s adjusted EBITDA of $25 million outpaced the Zacks Consensus Estimate of $14.07 million but decreased from the year-earlier quarter’s $28 million.

Wellbore Technologies:  Segmental revenues of $507 million outpaced the Zacks Consensus Estimate of $500 million and compared favorably with the year-ago quarter’s $361 million on the back of increased oil and gas drilling activity levels and gains in market share from some markets as well as higher pricing. The unit’s adjusted EBITDA of $77 million surpassed the Zacks Consensus Estimate of $72 million and exceeded the year-earlier quarter’s $21 million.

Completion & Production Solutions:  Revenues of $478 million missed the Zacks Consensus Estimate of $532 million and also dropped 20.5% from $601 million in the year-earlier quarter. This downside could be attributed to coronavirus-triggered constraints. The unit recorded a negative adjusted EBITDA of $5 million against the year-ago quarter’s figure of $63 million. However, the Zacks Consensus Estimate was an adjusted EBITDA of $15.90 million.

NOV Inc. Price, Consensus and EPS Surprise

NOV Inc. Price, Consensus and EPS Surprise

NOV Inc. price-consensus-eps-surprise-chart | NOV Inc. Quote

Backlog

Capital equipment order backlog for Rig Technologies was $2.78 billion as of Sep 30, 2021 including $300 million worth of new orders.

The Completion & Production Solutions’ backlog for capital equipment orders totalled $1.11 billion at the end of the third quarter comprising $384 million of new orders.

Balance Sheet

As of Sep 30, 2021, the company had cash and cash equivalents of $1.67 billion and a long-term debt of $1.7 billion. The total debt-to-total capitalization was 25.1%. The company has $2 billion available under its revolving credit facility.

Zacks Rank & Key Picks

NOV carries a Zacks Rank #3 (Hold), currently. Some better-ranked players in the energy space are Denbury Inc. (DEN - Free Report) , Diamondback Energy, Inc. (FANG - Free Report) and APA Corporation (APA - Free Report) , each presently flaunting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.


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