A month has gone by since the last earnings report for Nov Inc. (NOV Quick QuoteNOV - Free Report) . Shares have lost about 1.2% in that time frame, underperforming the S&P 500.

But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Nov Inc. due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its latest earnings report in order to get a better handle on the important catalysts.

NOV Q2 Earnings Miss, Revenues Beat Estimates, Both Decrease Y/Y

NOV reported second-quarter 2025 adjusted earnings of 29 cents per share, which marginally missed the Zacks Consensus Estimate of 30 cents. The bottom line decreased from the year-ago quarter’s 57 cents. This underperformance can be attributed to margin pressures on projects within its Energy Equipment segment.

The oil and gas equipment and services company’s total revenues of $2.2 billion beat the Zacks Consensus Estimate by 1.9%, driven by stronger-than-expected revenues from the Energy Equipment segment and the Energy Products and Services segment, which surpassed the consensus mark by 4% and 0.6%, respectively. However, revenues declined 1.3% from the year-ago quarter’s figure.

In the second quarter, NOV repurchased approximately 5.5 million shares of common stock for a total of $69 million. Along with a supplemental dividend of 21 cents per share and a regular dividend of 7.5 cents, the company returned $176 million in total capital to its shareholders during the quarter.

In the second quarter of 2025, NOV reported $19 million under Other Items, mainly associated with severance expenses, facility shutdowns and efforts to streamline business operations.

Segmental Performances

Energy Products and Services: The unit reported second-quarter revenues of $1.1 billion, which beat our prediction of $966 million. However, the figure decreased from the prior-year quarter’s reported number by 2.4%. The drop in revenues was due to a decrease in worldwide drilling operations, leading to diminished demand for the segment’s consumable products with shorter lifecycles.

Adjusted EBITDA of $146 million was below our estimate of $150.5 million. The reported actuals also decreased from $184 million in the corresponding period of 2024.

Energy Equipment: Revenues in this segment decreased 0.2% year over year to $1.2 billion, missing our estimation by 0.8%.

Adjusted EBITDA of $158 million increased from the year-earlier quarter’s $142 million. However, the figure missed our estimate of $171.2 million.

In the second quarter of 2025, the segment registered $420 million in new orders, a decrease of $557 million from the $977 million reported in the second quarter of 2024. Shipments from the backlog amounted to $632 million, resulting in a book-to-bill ratio of 66 compared with $553 million in shipments and a significantly higher book-to-bill ratio of 177 in the second quarter of 2024.

As of June 30, 2025, the backlog for Energy Equipment capital orders was $4.3 billion, reflecting a $31 million drop from the prior year.

Balance Sheet

As of June 30, 2025, the company had cash and cash equivalents of $1.1 billion and long-term debt of $1.7 billion with a debt-to-capitalization of 20.5%. The company had $1.5 billion available on its primary revolving credit facility during the same time.

This company generated $191 million in operating cash flow and $108 million in free cash flow in this quarter.

Significant and Strategic Advancements

NOV secured several important multi-year contracts, including providing digital services and automation for land and offshore drilling rigs, as well as engineering gas process systems and supplying critical equipment for floating LNG projects. In addition, the company advanced offshore wind capabilities through vessel designs and enhanced automation systems, which improved drilling efficiency and safety. Moreover, NOV expanded domestic manufacturing of key piping products for the Permian Basin while delivering composite piping solutions for major data centers supporting cloud computing and artificial intelligence growth.

Notably, its drilling technologies set new performance records in major shale plays such as Eagle Ford, Vaca Muerta and Bakken by introducing innovative tools for friction reduction and high-temperature drilling. NOV supplied integrated coiled tubing and well intervention equipment in Latin America and deployed advanced temperature control solutions to help operators address challenging drilling conditions worldwide. Together, these achievements highlight NOV’s commitment to innovation and operational excellence across multiple energy sectors.

Outlook

NOV projects a 1% to 3% decrease in consolidated revenues year over year for the third quarter of 2025, with adjusted EBITDA anticipated to range from $230 million to $250 million. The company anticipates a flat to 2% decline in revenues for the Energy Products and Services segment, with adjusted EBITDA expected between $130 million and $150 million. Meanwhile, the Energy Equipment segment is expected to see a 1% to 3% revenue decrease, alongside adjusted EBITDA of $145 million to $160 million.

Furthermore, NOV plans to return at least 50% of its excess free cash flow through a combination of quarterly base dividends, opportunistic stock repurchases and an annual supplemental dividend designed to ensure total shareholder returns remain aligned. The metric is calculated as cash flow from operations minus capital expenditures and other investments, including acquisitions and divestitures.

In addition, the company expects tariff costs to grow to $20-$25 million in the third quarter and $25-$30 million in the fourth quarter, where it will likely stabilize. However, costs could rise if tariffs increase again. Similarly, the company expects eliminations and corporate costs to remain consistent with the second quarter of 2025.

Looking ahead, the company expects drilling equipment aftermarket revenues to drop by the mid-teens in 2025, with a tax rate anticipated between 26% and 28%. Although cost-cutting efforts are projected to save more than $100 million annually by the end of 2026, rising tariffs and inflation could offset some of these savings.

Moreover, the company expects offshore activity to accelerate in 2026, thereby increasing demand for its production technologies. It also anticipates an improved global drilling market, supported by stable commodity prices, increased offshore drilling, steady rig counts in the Middle East and growth in drilling activities within the Middle East and Latin America. The company believes offshore drilling contractors will face fewer challenges and begin a strong recovery in the second half of 2026, which will boost demand for parts and upgrades.

Additionally, NOV expects a healthy pipeline of new FPSO projects, with up to 50 anticipated by the end of the decade. The company also anticipates growing investments in LNG and unconventional gas to drive demand for its specialized equipment.

Furthermore, the company expects its digital automation tools to continue delivering efficiency improvements for customers. It believes that activity in the Middle East will rebound by mid-2026 due to new investments and projects. The company expects offshore production to become the primary new source of oil, replacing U.S. shale. In parallel, it anticipates that growing natural gas demand will support expansion in unconventional gas production. The company also believes that the ongoing application of technology will enhance efficiency in oilfield operations.

Finally, it expects deepwater production to remain profitable even if oil prices stay below $50 per barrel, with output reaching about 13 million barrels per day by the end of 2026, thereby surpassing North America’s shale as a key new source of production.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates review.

The consensus estimate has shifted -13.63% due to these changes.

VGM Scores

At this time, Nov Inc. has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock has a score of A on the value side, putting it in the top quintile for value investors.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Nov Inc. has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.