NOV Inc. (NOV) Earnings and Revenue Exceed Estimates in Q2 – August 2, 2022

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NOV inc. (NOV Free Report) reported second-quarter 2022 adjusted earnings of 18 cents per share, beating Zacks’ consensus estimate of earnings of 5 cents. The outperformance can be attributed to the better than expected performance of all three segments of the company.

Additionally, net income improved from a loss of 4 cents a year ago due to improved execution, customer demand and pricing.

NOV’s total revenue of $1.73 billion beat Zacks’ consensus estimate by 5.8% and was up 21.9% from sales of $1.42 billion a year ago .

Sector performance

Platform Technologies: The unit generated $462 million in revenue in the second quarter, which beat Zacks’ consensus estimate of $443 million, but compares unfavorably to $487 million in the year-ago quarter. Adjusted EBITDA of $41 million topped Zacks’ consensus estimate of $37.44 million, but was down from the second quarter 2021 figure of $75 million. Segment results beating estimates for the reported quarter could be due to increasing demand for the unit’s aftermarket products and services due to increased global drilling.

Well technologies: Wellbore Technologies segment revenue of $666 million increased 43.8% year-over-year in the second quarter of 2022 and exceeded the consensus mark by approximately 6%. The unit’s adjusted EBITDA of $122 million also beat Zacks’ consensus estimate of $100 million and soared from prior quarter earnings of $63 million. Positive comparisons were driven by continued growth in the Western Hemisphere and Middle East, market share gains, higher prices and better management of ongoing supply chain disruptions.

Completion and production solutions: Year over year, segment revenue grew 28.6% to $639 million and also topped Zacks’ consensus estimate of $596 million. The unit’s adjusted EBITDA of $32 million increased from the prior year quarter profit of $4 million and also exceeded the consensus mark of $25.61 million, primarily due to growing demand for oil and gas equipment and improving execution in the face of ongoing supply chain challenges and operational issues. disturbances in shipyards.

Back

At the end of June 2022, NOV’s capital goods backlog for Rig Technologies stood at $2.84 billion, including $140 million in new orders. The company’s Completion & Production Solutions operations currently have an order backlog of $1.44 billion, including $530 million in new orders.

Balance sheet

As of June 30, 2022, the company had cash and cash equivalents of $1.22 billion and long-term debt of $1.72 billion, with a debt-to-capitalization ratio of 25. 6%. Investors should know that in the second quarter, NOV reinstated its dividend of 5 cents per share.

Outlook

NOV’s outlook remains positive and the company anticipates a strong rebound in revenue from the operation in the second half.

For the third quarter, NOV expects sequential revenue growth for the Rig Technologies segment between 5% and 10%, with EBITDA flowing into the mid-teens.

For the Wellbore Technologies unit, the company expects drilling activity growth rates in North America to slow, while momentum builds in the Eastern Hemisphere, which NOV says will help revenue growth of 4% to 7% in the third quarter.

The company anticipates lower pressure pumping revenue in the third quarter despite strong orders.

Zacks ranking and other stock picks

NOV currently wears a Zacks Rank #2 (Buy). Other top-ranked energy stocks worth looking at include Phillips 66 (PSX free report), Delek US Holdings (DK free report) and Gulfport Energy (GPOR Free Report), each sporting a Zacks Rank #1 (Strong Buy). You can see the full list of today’s Zacks #1 Rank stocks here.

Zacks consensus estimate for Phillips earnings in 2022 is $14.49 per share, up about 154.2% from earnings of $5.70 a year earlier.

PSX has beaten the Zacks consensus estimate for earnings over the past four quarters, averaging around 36.4%.

Zacks’ consensus estimate for Delek’s 2022 earnings has been revised up about 93.4% in the past 60 days from $3.97 to $7.68 per share.

Zacks’ consensus estimate for DK’s earnings in 2022 is $7.68 per share, up about 353.5% from a loss of $3.03 a year ago.

Gulfport Energy is valued at approximately $1.75 billion. The Zacks consensus estimate for GPO’s earnings in 2022 is set at $20.45 per share.

The Zacks consensus estimate for Gulfport Energy’s earnings in 2022 has been revised up about 16.5% in the past 60 days, from $17.56 per share to $20.45.

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