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NOV Stock Down 8% After Posting Loss Wider Than Estimates in Q1
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Shares of NOV Inc. (NOV - Free Report) have dropped 8% since the company’s first-quarter 2022 earnings announcement on Apr 28.
The stock performance could be attributed to the oil and gas equipment company posting an adjusted loss of 13 cents per share, wider than the Zacks Consensus Estimate of a loss of 6 cents. The underperformance reflects geopolitical turmoil-driven headwinds in the form of supply-chain bottlenecks, elevated costs and labor issues.
However, the bottom line improved from the year-ago loss of 28 cents on the steady recovery in demand and activity levels in the oilfield patch amid the surging commodity prices.
NOV’s total revenues of $1.55 billion surpassed the Zacks Consensus Estimate by 1.1% and rose 23.9% from the year-ago sales of $1.25 billion.
Segment Performances
Rig Technologies: The unit produced $441 million in first-quarter revenues, which edged past the Zacks Consensus Estimate of $431 million and also compared favorably with the year-ago quarter’s $431 million. Adjusted EBITDA of $36 million beat the Zacks Consensus Estimate of $21.44 million and increased from the first-quarter 2021 figure of $13 million. The segment’s results could rapidly improve market fundamentals, driving a growing backlog in capital equipment and aftermarket offerings, marginally offset by seasonal declines in supply-chain challenges.
Wellbore Technologies: NOV’s Wellbore Technologies segment’s revenues of $608 million increased by 47.2% year over year in the first quarter of 2022 and outpaced the consensus mark by 2.7%. The unit’s adjusted EBITDA of $101 million also surpassed the Zacks Consensus Estimate of $90 million and skyrocketed from the year-earlier quarter’s profit of $34 million. The positive comparison could be attributed to the growing global activity led by North America and the Middle East, which drove robust revenue growth across this segment's portfolio of businesses despite headwinds from supply-chain disruptions.
Completion & Production Solutions: Compared with the year ago, the segment’s revenues rose 20.7% to $530 million but lagged the Zacks Consensus Estimate of $551 million. However, the unit’s adjusted EBITDA of $10 million rose from the year-ago quarter’s loss of $4 million and also beat the consensus mark of $3.25 million, primarily due to better execution against the ongoing supply-chain disruptions, an improved product mix and better absorption of the company’s manufacturing plans.
At the end of March 2022, NOV’s capital equipment order backlog for Rig Technologies was $2.89 billion, including $236 million worth of new orders. The company’s Completion & Production Solutions operations currently have a $1.36 billion backlog, comprising $339 million of new orders.
Balance Sheet
As of Mar 31, 2022, the company had cash and cash equivalents of $1.41 billion and long-term debt of $1.7 billion, with a debt-to-capitalization of 25.4%. Investors should know that during the first quarter, NOV reinstated its dividend of 5 cents per share.
Outlook
NOV’s outlook for the future is constructive, given the steady tightening of oilfield services capacity that is accelerating demand for its core oilfield products. As a reflection of the strong appetite for its products, the company’s Completion & Production Solutions backlog increased 68% year over year. A fresh order outlook and pricing are growing increasingly favorable, with tracked pipe inventories at near record lows. For the Wellbore Technologies segment, NOV expects continued improvements in the global oil field activity to drive revenue growth despite the ongoing supply-chain challenges. The outlook largely remains strong as improved commodity prices have significantly enhanced project economics despite the rising costs.
Zacks Rank & Stock Picks
NOV currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks from the energy sector that came out with their earnings reports recently include ConocoPhillips (COP - Free Report) , TotalEnergies SE (TTE - Free Report) and The Williams Companies, Inc. (WMB - Free Report) . While ConocoPhillips and TotalEnergies each sport a Zacks Rank #1 (Strong Buy), Williams carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
ConocoPhillips reported first-quarter 2022 adjusted earnings per share (EPS) of $3.27, beating the Zacks Consensus Estimate of $3.24. The strong quarterly results were aided by increased oil-equivalent production volumes and realized commodity prices.
ConocoPhillips revised higher its expected 2022 return of capital to shareholders. COP’s new guidance is pegged at $10 billion, reflecting an increase from the aforementioned $8 billion. The incremental returns to stockholders will get distributed through share repurchases and VROC tiers.
TotalEnergies SE reported first-quarter 2022 operating earnings of $3.40 (€3.03) per share, beating the Zacks Consensus Estimate of $2.79. The improvement was due to an increase in commodity prices.
As of Mar 31, 2022, TotalEnergies’ cash and cash equivalents were $31.3 billion. Net debt to capital was 12.5% at the end of the first quarter of 2022, down from 23.7% at the end of the first quarter of 2021. TTE expects to invest $15 billion in 2022, out of which 25% will be allocated to further strengthen renewable operation and electricity.
Williams reported first-quarter 2022 adjusted EPS of 41 cents, beating the Zacks Consensus Estimate of 36 cents. The outperformance was due to higher-than-expected contributions from one major segment.
As of Mar 31, 2022, Williams had cash and cash equivalents of $604 million and long-term debt of $20.8 billion, with a debt-to-capitalization of 59.8%. WMB’s dividend guidance increased 3.7% on an annualized basis to $1.70 in 2022 from $1.64 in 2021.
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NOV Stock Down 8% After Posting Loss Wider Than Estimates in Q1
Shares of NOV Inc. (NOV - Free Report) have dropped 8% since the company’s first-quarter 2022 earnings announcement on Apr 28.
The stock performance could be attributed to the oil and gas equipment company posting an adjusted loss of 13 cents per share, wider than the Zacks Consensus Estimate of a loss of 6 cents. The underperformance reflects geopolitical turmoil-driven headwinds in the form of supply-chain bottlenecks, elevated costs and labor issues.
However, the bottom line improved from the year-ago loss of 28 cents on the steady recovery in demand and activity levels in the oilfield patch amid the surging commodity prices.
NOV’s total revenues of $1.55 billion surpassed the Zacks Consensus Estimate by 1.1% and rose 23.9% from the year-ago sales of $1.25 billion.
Segment Performances
Rig Technologies: The unit produced $441 million in first-quarter revenues, which edged past the Zacks Consensus Estimate of $431 million and also compared favorably with the year-ago quarter’s $431 million. Adjusted EBITDA of $36 million beat the Zacks Consensus Estimate of $21.44 million and increased from the first-quarter 2021 figure of $13 million. The segment’s results could rapidly improve market fundamentals, driving a growing backlog in capital equipment and aftermarket offerings, marginally offset by seasonal declines in supply-chain challenges.
Wellbore Technologies: NOV’s Wellbore Technologies segment’s revenues of $608 million increased by 47.2% year over year in the first quarter of 2022 and outpaced the consensus mark by 2.7%. The unit’s adjusted EBITDA of $101 million also surpassed the Zacks Consensus Estimate of $90 million and skyrocketed from the year-earlier quarter’s profit of $34 million. The positive comparison could be attributed to the growing global activity led by North America and the Middle East, which drove robust revenue growth across this segment's portfolio of businesses despite headwinds from supply-chain disruptions.
Completion & Production Solutions: Compared with the year ago, the segment’s revenues rose 20.7% to $530 million but lagged the Zacks Consensus Estimate of $551 million. However, the unit’s adjusted EBITDA of $10 million rose from the year-ago quarter’s loss of $4 million and also beat the consensus mark of $3.25 million, primarily due to better execution against the ongoing supply-chain disruptions, an improved product mix and better absorption of the company’s manufacturing plans.
NOV Inc. Price, Consensus and EPS Surprise
NOV Inc. price-consensus-eps-surprise-chart | NOV Inc. Quote
Backlog
At the end of March 2022, NOV’s capital equipment order backlog for Rig Technologies was $2.89 billion, including $236 million worth of new orders. The company’s Completion & Production Solutions operations currently have a $1.36 billion backlog, comprising $339 million of new orders.
Balance Sheet
As of Mar 31, 2022, the company had cash and cash equivalents of $1.41 billion and long-term debt of $1.7 billion, with a debt-to-capitalization of 25.4%. Investors should know that during the first quarter, NOV reinstated its dividend of 5 cents per share.
Outlook
NOV’s outlook for the future is constructive, given the steady tightening of oilfield services capacity that is accelerating demand for its core oilfield products. As a reflection of the strong appetite for its products, the company’s Completion & Production Solutions backlog increased 68% year over year. A fresh order outlook and pricing are growing increasingly favorable, with tracked pipe inventories at near record lows. For the Wellbore Technologies segment, NOV expects continued improvements in the global oil field activity to drive revenue growth despite the ongoing supply-chain challenges. The outlook largely remains strong as improved commodity prices have significantly enhanced project economics despite the rising costs.
Zacks Rank & Stock Picks
NOV currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks from the energy sector that came out with their earnings reports recently include ConocoPhillips (COP - Free Report) , TotalEnergies SE (TTE - Free Report) and The Williams Companies, Inc. (WMB - Free Report) . While ConocoPhillips and TotalEnergies each sport a Zacks Rank #1 (Strong Buy), Williams carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
ConocoPhillips reported first-quarter 2022 adjusted earnings per share (EPS) of $3.27, beating the Zacks Consensus Estimate of $3.24. The strong quarterly results were aided by increased oil-equivalent production volumes and realized commodity prices.
ConocoPhillips revised higher its expected 2022 return of capital to shareholders. COP’s new guidance is pegged at $10 billion, reflecting an increase from the aforementioned $8 billion. The incremental returns to stockholders will get distributed through share repurchases and VROC tiers.
TotalEnergies SE reported first-quarter 2022 operating earnings of $3.40 (€3.03) per share, beating the Zacks Consensus Estimate of $2.79. The improvement was due to an increase in commodity prices.
As of Mar 31, 2022, TotalEnergies’ cash and cash equivalents were $31.3 billion. Net debt to capital was 12.5% at the end of the first quarter of 2022, down from 23.7% at the end of the first quarter of 2021. TTE expects to invest $15 billion in 2022, out of which 25% will be allocated to further strengthen renewable operation and electricity.
Williams reported first-quarter 2022 adjusted EPS of 41 cents, beating the Zacks Consensus Estimate of 36 cents. The outperformance was due to higher-than-expected contributions from one major segment.
As of Mar 31, 2022, Williams had cash and cash equivalents of $604 million and long-term debt of $20.8 billion, with a debt-to-capitalization of 59.8%. WMB’s dividend guidance increased 3.7% on an annualized basis to $1.70 in 2022 from $1.64 in 2021.