NOV Inc. (NOV Quick QuoteNOV - Free Report) reported third-quarter 2024 adjusted earnings of 33 cents per share, which missed the Zacks Consensus Estimate of 35 cents. The underperformance can be attributed to challenges in execution, customer demand and pricing. However, the bottom line improved from the year-ago quarter’s 29 cents.

The oil and gas equipment and services company’s total revenues of $2.2 billion missed the Zacks Consensus Estimate by 2%. However, total revenues increased 0.3% from the year-ago quarter’s figure. Better-than-expected performance in the Energy Equipment segment was the influencing factor.

The company returned a total of $109 million to its shareholders, comprising $80 million in share repurchases and $29 million in dividends in this quarter. NOV repurchased 4.6 million shares of common stock at the same time.

As of Sept. 30, the company repurchased a total of 6.6 million shares for $117 million.

Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.

On Sept. 12, 2024, the company established a new $1.50 billion unsecured revolving credit facility to replace its previous credit arrangement. This facility, which will mature in September 2029, includes a primary financial covenant of a maximum debt-to-capitalization ratio of 60%.

Segmental Performances of NOV

Energy Products and Services: The unit reported third-quarter revenues of $1 billion, which missed our projection of $1.1 billion. The figure also decreased from the prior-year quarter’s reported number by 3% due to weak demand in international and offshore markets.

Adjusted EBITDA of $172 million was below our estimate of $188.8 million. The reported actuals also decreased from $197 million in the corresponding period of 2023, owing to the declined activity of North America.

Energy Equipment: Revenues in this segment increased 2% year over year to $1.2 billion, beating our projection by 0.8%.

Adjusted EBITDA of $159 million increased from the year-earlier quarter’s $124 million. The segment's revenues and profitability increased because of solid demand for aftermarket products and services, strong execution on the growing capital equipment backlog and cost-saving initiatives. Additionally, the figure was more than our estimate of $144.8 million.

This segment experienced strong demand with new orders of $627 million in the quarter, indicating a $79 million increase from a year ago, resulting in a book-to-bill ratio of 111%.

As of Sept. 30, the backlog for Energy Equipment capital orders was $4.5 billion, indicating a $485 million increase from the prior year.

NOV’s Balance Sheet

As of Sept. 30, 2024, the company had cash and cash equivalents of $827 million and long-term debt of $1.7 billion, with a debt-to-capitalization of 20.9%.

This Zacks Rank #3 (Hold) company generated $359 million in operating cash flow and $350 million in free cash flow in this quarter.
 

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

NOV’s Outlook

The company expects to return at least 50% of excess free cash flow through a combination of consistent quarterly base dividends, opportunistic stock buybacks and an annual supplemental dividend to adjust returns to its shareholders on an annual basis.

For the fourth quarter of 2024, NOV expects year-over-year consolidated revenues to decline by 3-5%, with adjusted EBITDA projected to be between $280 million and $300 million. For the full year, adjusted EBITDA is anticipated to be near the lower end of the company's previous guidance of $1.10 billion to $1.18 billion.
 

Important Energy Earnings So Far

While it is early in the earnings season, there have been a few key energy releases thus far. Let us glance through a couple of them.

Liberty Energy (LBRT Quick QuoteLBRT - Free Report) , the Denver-CO-based oil and gas equipment company, announced an adjusted net income of 45 cents per share, which missed the Zacks Consensus Estimate of 55 cents. This was primarily due to poor equipment and services execution and lower activity in the reported quarter. Additionally, the bottom line declined from the year-ago quarter’s reported figure of 86 cents due to a year-over-year increase in costs and expenses.

Ahead of the earnings release, LBRT’s board of directors announced a dividend of 8 cents per common share payable on Dec. 20, to its stockholders of record as of Dec. 6. This dividend represents a 14% increase from the prior regular quarterly dividend of 7 cents per share. In the quarter, Liberty returned $51 million to its shareholders through a combination of share repurchases and cash dividends.

Energy infrastructure provider,Kinder Morgan, Inc. (KMI Quick QuoteKMI - Free Report) reported third-quarter adjusted earnings per share of 25 cents, which missed the Zacks Consensus Estimate of 27 cents. The bottom line was flat year over year. The weakness in quarterly results was caused by lower contributions from the Products Pipelines and CO2 business segments.

KMI also announced a quarterly cash dividend of 28.75 cents per share for the third quarter of 2024 (annualized dividend of $1.15), implying a 2% increase from the third-quarter 2023 level. The dividend is payable on Nov. 15, 2024, to its shareholders of record as of Oct. 31.

Schlumberger Limited (SLB Quick QuoteSLB - Free Report) , a Houston, TX-based oil and gas equipment and services provider announced third-quarter earnings of 89 cents per share (excluding charges and credits), which beat the Zacks Consensus Estimate of 88 cents. The bottom line also increased from the year-ago quarter’s 78 cents.

The strong quarterly earnings were primarily driven by broad-based earnings growth and margin expansion, especially in the Middle East, Asia and offshore North America. Additionally, cost optimization, greater adoption of digital solutions and contributions from long-cycle deepwater and gas projects played significant roles.