- Net Income of $130 million, or $0.33 per share, up $16 million,
or $0.04 per share, year-over-year
- Adjusted EBITDA* of $286 million, an increase of $19 million
year-over-year
- Cash flow from operations of $359 million and free cash flow*
of $277 million
- Bookings of $627 million, representing a 111% book-to-bill
- Repurchased 4.6 million shares of common stock
* Adjusted EBITDA and Free Cash Flow are non-GAAP measures, see
“Non-GAAP Financial Measures,” “Reconciliation of Cash Flows from
Operating Activities to Free Cash Flow" and “Reconciliation of
Adjusted EBITDA to Net Income” below.
NOV Inc. (NYSE: NOV) today reported third quarter 2024 revenues
of $2.19 billion, an increase of $6 million compared to the third
quarter of 2023. Net income increased 14 percent to $130 million,
or $0.33 per share, and operating profit increased six percent to
$194 million, or 8.9 percent of sales. The Company recorded $5
million within Other Items (see Corporate Information for
additional details). Adjusted EBITDA increased seven percent
year-over-year to $286 million, or 13.1 percent of sales.
“During the third quarter of 2024, NOV continued to improve cash
flow, backlog, profitability and margins compared to the prior
year,” stated Clay Williams, Chairman, President, and CEO.
“Revenues improved modestly compared to the third quarter of 2023,
with strong execution on our growing backlog, increasing demand for
aftermarket parts and services, and greater business efficiency
driving margins higher. Additionally, demand for our capital
equipment continued to grow in support of long-cycle offshore and
international projects with NOV achieving a book-to-bill of 111%
during the quarter, and 123% year-to-date.
“Solid results and steadily improving working capital efficiency
enabled the Company to generate free cash flow of $277 million
during the third quarter. NOV returned a total of $109 million to
shareholders through a combination of share repurchases totaling
$80 million and dividends totaling $29 million.
“As we look to year-end and into 2025, we see operators taking
an incrementally more cautious approach to their activities in view
of greater oil price uncertainty. Despite some emerging near-term
headwinds, most international and offshore gas projects continue to
press ahead resolutely, and we are confident that NOV’s
technologies will continue to underpin these critical energy
projects around the globe. We are committed to prudently investing
in new and better ways to help our customers drive safer,
more-efficient and less-environmentally impactful operations, while
returning meaningful capital to our shareholders.”
Energy Products and Services
Energy Products and Services generated revenues of $1.00 billion
in the third quarter of 2024, a decrease of three percent from the
third quarter of 2023. Operating profit decreased $31 million from
the prior year to $114 million, or 11.4 percent of sales, and
included $3 million in Other Items. Adjusted EBITDA decreased $25
million from the prior year to $172 million, or 17.1 percent of
sales. The decrease in revenue and profit was primarily due to
lower drilling activity levels in North America, partially offset
by contributions from the Company's recent artificial lift
acquisition.
Energy Equipment
Energy Equipment generated revenues of $1.22 billion in the
third quarter of 2024, an increase of two percent from the third
quarter of 2023. Operating profit increased $31 million from the
prior year to $129 million, or 10.6 percent of sales, and included
$1 million in Other Items. Adjusted EBITDA increased $35 million
from the prior year to $159 million, or 13.0 percent of sales.
Improved profitability was the result of strong execution on the
segment’s improving backlog and better demand for aftermarket parts
and services.
New orders totaled $627 million, an increase of $79 million when
compared to the $548 million of new orders booked during the third
quarter of 2023. Orders shipped from backlog in the third quarter
of 2024 were $563 million, representing a book-to-bill of 111
percent, compared to $537 million orders shipped and a book-to-bill
of 102 percent in the third quarter of 2023. As of September 30,
2024, backlog for capital equipment orders for Energy Equipment was
$4,478 million, an increase of $485 million from the third quarter
of 2023.
Outlook
The Company is providing financial guidance for the fourth
quarter of 2024 and full year 2024. Guidance is based on current
outlook and plans and is subject to a number of known and unknown
uncertainties and risks and constitutes “forward-looking
statements” within the meaning of Section 21E of the Securities
Exchange Act of 1934 as further described under the Cautionary
Statement below. Actual results may differ materially from the
guidance set forth below.
For the fourth quarter of 2024 management expects year-over-year
consolidated revenues to be down three to five percent with
Adjusted EBITDA between $280 million and $300 million. Full-year
Adjusted EBITDA is expected to be near the lower end of the
company's prior guidance range of between $1.10 billion and $1.18
billion.
Corporate Information
NOV repurchased 4.6 million shares of common stock for $80
million during the third quarter. Year-to-date, the Company
repurchased 6.6 million shares of common stock for an aggregate
amount of $117 million. NOV expects to return at least 50 percent
of Excess Free Cash Flow (defined as cash flow from operations less
capital expenditures and other investments, including acquisitions)
through a combination of steady, quarterly base dividends,
opportunistic stock buybacks, and a supplemental dividend to
true-up returns to shareholders on an annual basis.
During the third quarter of 2024, NOV recorded $5 million in
Other Items, primarily related to severance pay (see Reconciliation
of Adjusted EBITDA to Net Income).
On September 12, 2024, the Company replaced its existing credit
facility with a new $1.50 billion unsecured revolving credit
facility that matures in September 2029 and is subject to one
primary financial covenant, a maximum debt-to-capitalization ratio
of 60 percent.
As of September 30, 2024, the Company had total debt of $1.75
billion, with $1.50 billion available on its primary revolving
credit facility, and $985 million in cash and cash equivalents.
Significant Achievements
NOV signed a five-year strategic relationship agreement with a
major North Sea operator to enhance drilling operations using NOV’s
downhole broadband network and automation technology across the
operator’s North Sea fleet. This agreement is in addition to the
framework agreement signed in the second quarter to outfit the
operator’s fleet with NOV’s wired drill pipe technology and
services and further expands our relationship with this customer.
The partnership will integrate NOV's Downhole Broadband Solutions
wired drill pipe and NOVOS™ automation platform to improve rig
performance, safety, environmental sustainability, and production
potential.
NOV was awarded a contract to supply spread mooring tensioning
systems for two floating production, storage, and offloading (FPSO)
vessels in Latin America. With its extensive expertise and robust
offshore production portfolio, NOV is well-positioned to meet the
growing demands of the floating production market.
NOV’s Subsea Flexible Pipe business was named the Best Supplier
in the Flexible Pipe category at the 7th annual Best Suppliers
Award competition during the Rio Oil and Gas conference, marking
the business unit's second consecutive year to receive this
recognition. The operation was also recently named the Foreign
Company of the Year by the American Chamber of Commerce in Denmark.
Both awards highlight the business’ leadership in execution for its
customers, quality and safety.
NOV’s ATOM™ RTX Robotics technology secured repeat orders for
two additional systems destined for two land rigs. The robotics
technology will jointly integrate into the customer's rig layouts
for automated piped handling, stabbing, doping, and mud
containment, thereby removing personnel from the red zone and
enhancing safety.
NOV received two orders for higher capacity hookload upgrades to
convert sixth generation assets into seventh generation technology
rigs as clients continue to advance fleet capabilities and enhance
the competitiveness of their ultra-deepwater assets. The upgrades
include larger load path equipment, associated structural
enhancements, and the latest rig controls and monitoring
technology.
NOV's Fiber Glass Systems business unit has been named one of 13
Phase 1 winners of the US Department of Energy's MAKE IT Prize for
NOV’s innovative double-wall composite pipes for hydrogen
transport. The prize focuses on supporting facilities with the
capabilities to manufacture critical energy transition
infrastructure. The double-wall composite pipe concept aims to
provide a safer, lower-cost, and more efficient method for
transporting hydrogen. Leveraging decades of expertise and advanced
technology, NOV is committed to driving the world's transition to
more sustainable energy solutions.
NOV delivered 40,000 horsepower of its Ideal™ eFrac Fracturing
Units to a leading North American oilfield service company,
underscoring the ongoing customer interest in upgrading their
assets to the latest technology. The shipment included NOV’s Power
Pod solutions, which facilitate the integration of Ideal frac pumps
with dual-fuel or conventional pumpers, enabling the creation of a
hybrid fleet.
NOV’s Automation Performance Center service continues to gain
momentum as customers benefit from record-setting drilling
performance. Leveraging NOV’s unparalleled library of rig
performance data, the Performance Center’s remote support team
provides 24/7 assistance to optimize rig configurations and
drilling methodologies. During the quarter, four drilling
contractors in different regions realized new weight-to-weight
records (the time between two drilled stands, which starts when the
drill string is lifted off bottom and lasts until the string is on
bottom again) using the Performance Center’s expertise.
After quarter end, NOV completed the acquisition of Fortress
Downhole Tools, a leading provider of recyclable setting tools and
services in North America. Fortress’ patented CYCLOPS™ setting tool
technology and unique recycling program offer proven reliability,
reduced downtime, and significantly reduced waste compared to
conventional field redressable and disposable setting tool
offerings. This acquisition expands NOV’s portfolio of completions
tools that increase operational efficiency, enhance reservoir
performance and improve production.
NOV secured orders for fourteen cranes for offshore projects
across Asia, Europe, and North America. These orders included
active-heave compensated subsea cranes for new offshore
construction vessels, and an all-electric crane and several
electro-hydraulic cranes for offshore production applications. The
orders further solidify NOV's long history as a global leader in
providing innovative and reliable crane technologies.
NOV assisted in the deployment of the world’s deepest 16 by
18-5/8-inch expandable liner in Saudi Arabia. Utilizing an NOV
Anderreamer™ tool, the team effectively enlarged an offshore gas
exploration well from 16 to 19 inches, a task that has historically
presented significant challenges in this location and hole size.
The operation reduced the risks of formation collapse and
facilitated access to deeper and more prolific reserves, boosting
production capacity for the operator. This achievement was made
possible through the exceptional durability of the Anderreamer tool
as well as collaborative planning and execution at the rig
site.
NOV further expanded its footprint in municipal water markets,
securing two significant orders. A global EPC leader ordered 11,000
feet of F-Chem™ composite pipes and fittings to be used in a new
water treatment center in Florida. This state-of-the-art center is
designed to deliver 50 million gallons per day of clean water and
withstand Category five hurricane winds. NOV also received orders
for several Chemineer™ mixing products for a water treatment
facility in Oregon. This facility will upgrade its existing
flocculation equipment with NOV’s 20GT agitators and XE-3 impellers
to achieve the precise mixing intensity required to effectively
produce potable water by removing solids.
NOV was awarded a contract to supply 520,000 ft of 2 ⅞-in. to 4
½-in. production tubing with Tuboscope’s TK™-236 internal plastic
coating for Kuwait’s Wafra Zone. The harsh, sour environment in
this zone has historically caused severe internal corrosion on
uncoated tubulars, leading to costly downtime and reduced asset
life. After extensive testing, the TK-236 coating was chosen for
its reliable corrosion protection, flow efficiency, and
effectiveness in high H2S environments.
NOV successfully deployed the first Max Completions™ ToolSight™
Remote Thru-Tubing Monitoring system for a West Texas operator. By
leveraging NOV’s Max Completions platform and edge devices to
aggregate, cleanse, and contextualize data from coiled tubing
operations and downhole tools, the system enables better decision
making, driving improved efficiencies of intervention and
stimulation operations.
Third Quarter Earnings Conference Call
NOV will hold a conference call to discuss its third quarter
2024 results on October 25, 2024 at 10:00 AM Central Time (11:00 AM
Eastern Time). The call will be broadcast simultaneously at
www.nov.com/investors. A replay will be available on the website
for 30 days.
About NOV
NOV (NYSE: NOV) delivers technology-driven solutions to empower
the global energy industry. For more than 150 years, NOV has
pioneered innovations that enable its customers to safely produce
abundant energy while minimizing environmental impact. The energy
industry depends on NOV’s deep expertise and technology to
continually improve oilfield operations and assist in efforts to
advance the energy transition towards a more sustainable future.
NOV powers the industry that powers the world.
Visit www.nov.com for more information.
Non-GAAP Financial Measures
This press release contains certain non-GAAP financial measures
that management believes are useful tools for internal use and the
investment community in evaluating NOV’s overall financial
performance. These non-GAAP financial measures are broadly used to
value and compare companies in the oilfield services and equipment
industry. Not all companies define these measures in the same way.
In addition, these non-GAAP financial measures are not a substitute
for financial measures prepared in accordance with GAAP and should
therefore be considered only as supplemental to such GAAP financial
measures. Additionally, free cash flow and Excess Free Cash Flow do
not represent the Company’s residual cash flow available for
discretionary expenditures, as the calculation of these measures
does not account for certain debt service requirements or other
non-discretionary expenditures. Please see the attached schedules
for reconciliations of the differences between the non-GAAP
financial measures used in this press release and the most directly
comparable GAAP financial measures.
This press release contains certain forward-looking non-GAAP
financial measures, including Adjusted EBITDA. The Company has not
provided a reconciliation of projected Adjusted EBITDA. Management
cannot predict with a reasonable degree of accuracy certain of the
necessary components of net income, such as other income (expense),
which includes fluctuations in foreign currencies. As such, a
reconciliation of projected Adjusted EBITDA to projected net income
is not available without unreasonable effort. The actual amount of
other income (expense), provision (benefit) for income taxes,
equity income in unconsolidated affiliates, depreciation and
amortization, and other amounts excluded from Adjusted EBITDA could
have a significant impact on net income.
Cautionary Statement for the Purpose of the “Safe Harbor”
Provisions of the Private Securities Litigation Reform Act of
1995
Statements made in this press release that are forward-looking
in nature are intended to be “forward-looking statements” within
the meaning of Section 21E of the Securities Exchange Act of 1934
and may involve risks and uncertainties. These statements may
differ materially from the actual future events or results. Readers
are referred to documents filed by NOV with the Securities and
Exchange Commission, including the Annual Report on Form 10-K,
which identify significant risk factors which could cause actual
results to differ from those contained in the forward-looking
statements. These statements speak only as of the date of this
document, and we undertake no obligation to update or revise the
statements, except as may be required by law.
Certain prior period amounts have been reclassified in this
press release to be consistent with current period
presentation.
NOV INC.
CONSOLIDATED STATEMENTS OF
INCOME (Unaudited)
(In millions, except per share
data)
Three Months Ended
Nine Months Ended
September 30,
June 30,
September 30,
2024
2023
2024
2024
2023
Revenue:
Energy Products and Services
$
1,003
$
1,034
$
1,050
$
3,070
$
3,004
Energy Equipment
1,219
1,195
1,204
3,601
3,364
Eliminations
(31
)
(44
)
(38
)
(109
)
(128
)
Total revenue
2,191
2,185
2,216
6,562
6,240
Gross profit
469
468
590
1,517
1,336
Gross profit %
21.4
%
21.4
%
26.6
%
23.1
%
21.4
%
Selling, general, and administrative
275
285
277
848
846
Operating profit
194
183
313
669
490
Interest expense, net
(10
)
(18
)
(14
)
(40
)
(44
)
Equity income in unconsolidated
affiliates
—
16
8
37
101
Other expense, net
(10
)
(25
)
(14
)
(34
)
(70
)
Income before income taxes
174
156
293
632
477
Provision for income taxes
44
48
70
158
87
Net income
130
108
223
474
390
Net loss attributable to noncontrolling
interests
—
(6
)
(3
)
(1
)
(5
)
Net income attributable to Company
$
130
$
114
$
226
$
475
$
395
Per share data:
Basic
$
0.33
$
0.29
$
0.57
$
1.21
$
1.01
Diluted
$
0.33
$
0.29
$
0.57
$
1.20
$
1.00
Weighted average shares outstanding:
Basic
392
393
395
394
393
Diluted
395
396
397
397
396
NOV INC.
CONSOLIDATED BALANCE
SHEETS
(In millions)
September 30,
December 31,
2024
2023
ASSETS
(Unaudited)
Current assets:
Cash and cash equivalents
$
985
$
816
Receivables, net
1,896
1,905
Inventories, net
2,123
2,151
Contract assets
684
739
Prepaid and other current assets
230
229
Total current assets
5,918
5,840
Property, plant and equipment, net
1,908
1,865
Lease right-of-use assets
550
544
Goodwill and intangibles, net
2,105
2,012
Other assets
941
1,033
Total assets
$
11,422
$
11,294
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable
$
835
$
904
Accrued liabilities
819
870
Contract liabilities
495
532
Current portion of lease liabilities
101
94
Current portion of long-term debt
28
13
Accrued income taxes
22
22
Total current liabilities
2,300
2,435
Long-term debt
1,721
1,712
Lease liabilities
551
558
Other liabilities
334
347
Total liabilities
4,906
5,052
Total stockholders’ equity
6,516
6,242
Total liabilities and stockholders’
equity
$
11,422
$
11,294
NOV INC.
CONSOLIDATED STATEMENTS OF
CASH FLOWS (Unaudited)
(In millions)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2024
2024
2023
Cash flows from operating activities:
Net income
$
130
$
474
$
390
Adjustments to reconcile net income to net
cash provided by (used in) operating activities:
Depreciation and amortization
86
255
225
Working capital, net
133
(89
)
(784
)
Other operating items, net
10
73
(65
)
Net cash provided by (used in) operating
activities
359
713
(234
)
Cash flows from investing activities:
Purchases of property, plant and
equipment
(82
)
(233
)
(207
)
Business acquisitions, net of cash
acquired
—
(252
)
(14
)
Business divestitures, net of cash
disposed
—
176
—
Other
—
1
10
Net cash used in investing activities
(82
)
(308
)
(211
)
Cash flows from financing activities:
Borrowings against lines of credit and
other debt
—
419
62
Payments against lines of credit and other
debt
—
(422
)
(65
)
Cash dividends paid
(29
)
(79
)
(60
)
Share repurchases
(80
)
(117
)
—
Other
(13
)
(36
)
(43
)
Net cash used in financing activities
(122
)
(235
)
(106
)
Effect of exchange rates on cash
3
(1
)
(5
)
Increase (decrease) in cash and cash
equivalents
158
169
(556
)
Cash and cash equivalents, beginning of
period
827
816
1,069
Cash and cash equivalents, end of
period
$
985
$
985
$
513
NOV INC. RECONCILIATION OF CASH FLOWS
FROM OPERATING ACTIVITIES TO FREE CASH FLOW (Unaudited) (In
millions)
Presented below is a reconciliation of cash flow from operating
activities to “free cash flow”. The Company defines free cash flow
as cash flow from operating activities less purchases of property,
plant and equipment, or “capital expenditures”. Management believes
this is important information to provide because it is used by
management to evaluate the Company’s operational performance and
trends between periods and manage the business. Management also
believes this information may be useful to investors and analysts
to gain a better understanding of the Company’s results of ongoing
operations. Free cash flow is not intended to replace GAAP
financial measures.
Three Months Ended
Nine Months Ended
September 30,
September 30,
2024
2024
2023
Total cash flows provided by (used in)
operating activities
$
359
$
713
$
(234
)
Capital expenditures
(82
)
(233
)
(207
)
Free cash flow
$
277
$
480
$
(441
)
NOV INC. RECONCILIATION OF ADJUSTED
EBITDA TO NET INCOME (Unaudited) (In millions)
Presented below is a reconciliation of Net Income to Adjusted
EBITDA. The Company defines Adjusted EBITDA as Operating Profit
excluding Depreciation, Amortization, Gains and Losses on Sales of
Fixed Assets, and, when applicable, Other Items. Adjusted EBITDA %
is a ratio showing Adjusted EBITDA as a percentage of sales.
Management believes this is important information to provide
because it is used by management to evaluate the Company’s
operational performance and trends between periods and manage the
business. Management also believes this information may be useful
to investors and analysts to gain a better understanding of the
Company’s results of ongoing operations. Adjusted EBITDA and
Adjusted EBITDA % are not intended to replace GAAP financial
measures, such as Net Income and Operating Profit %. Other Items
include gain on business divestiture, impairment, restructure,
severance, facility closure costs and inventory charges and
credits.
Three Months Ended
Nine Months Ended
September 30,
June 30,
September 30,
2024
2023
2024
2024
2023
Operating profit:
Energy Products and Services
$
114
$
145
$
128
$
363
$
413
Energy Equipment
129
98
232
456
250
Eliminations and corporate costs
(49
)
(60
)
(47
)
(150
)
(173
)
Total operating profit
$
194
$
183
$
313
$
669
$
490
Operating profit %:
Energy Products and Services
11.4
%
14.0
%
12.2
%
11.8
%
13.7
%
Energy Equipment
10.6
%
8.2
%
19.3
%
12.7
%
7.4
%
Eliminations and corporate costs
—
—
—
—
—
Total operating profit %
8.9
%
8.4
%
14.1
%
10.2
%
7.9
%
Other items, net:
Energy Products and Services
$
3
$
4
$
1
$
4
$
3
Energy Equipment
1
(2
)
(119
)
(122
)
(13
)
Corporate
1
5
—
2
6
Total other items
$
5
$
7
$
(118
)
$
(116
)
$
(4
)
(Gain)/loss on sales of fixed assets:
Energy Products and Services
$
1
$
1
$
—
$
—
$
(2
)
Energy Equipment
—
—
—
—
(3
)
Corporate
—
(1
)
—
—
1
Total (gain)/loss on sales of fixed
assets
$
1
$
—
$
—
$
—
$
(4
)
Depreciation & amortization:
Energy Products and Services
$
54
$
47
$
55
$
163
$
135
Energy Equipment
29
28
29
86
83
Corporate
3
2
2
6
7
Total depreciation & amortization
$
86
$
77
$
86
$
255
$
225
Adjusted EBITDA:
Energy Products and Services
$
172
$
197
$
184
$
530
$
549
Energy Equipment
159
124
142
420
317
Eliminations and corporate costs
(45
)
(54
)
(45
)
(142
)
(159
)
Total Adjusted EBITDA
$
286
$
267
$
281
$
808
$
707
Adjusted EBITDA %:
Energy Products and Services
17.1
%
19.1
%
17.5
%
17.3
%
18.3
%
Energy Equipment
13.0
%
10.4
%
11.8
%
11.7
%
9.4
%
Corporate
—
—
—
—
—
Total Adjusted EBITDA %
13.1
%
12.2
%
12.7
%
12.3
%
11.3
%
Reconciliation of Adjusted EBITDA:
GAAP net income attributable to
Company
$
130
$
114
$
226
$
475
$
395
Noncontrolling interests
—
(6
)
(3
)
(1
)
(5
)
Provision for income taxes
44
48
70
158
87
Interest expense
21
23
22
67
65
Interest income
(11
)
(5
)
(8
)
(27
)
(21
)
Equity income in unconsolidated
affiliates
—
(16
)
(8
)
(37
)
(101
)
Other expense, net
10
25
14
34
70
(Gain)/loss on sales of fixed assets
1
—
—
—
(4
)
Depreciation and amortization
86
77
86
255
225
Other items, net
5
7
(118
)
(116
)
(4
)
Total Adjusted EBITDA
$
286
$
267
$
281
$
808
$
707
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241024762507/en/
Amie D'Ambrosio Director, Investor Relations (713) 375-3826
Amie.DAmbrosio@nov.com
NOV (NYSE:NOV)
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