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National Oilwell (NOV) Posts Wider-Than-Expected Q4 Loss

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National Oilwell Varco, Inc. NOV reported adjusted loss of 42 cents per share for fourth-quarter 2020, wider than the Zacks Consensus Estimate of a loss of 12 cents. However, the year-ago bottom line was a profit of 13 cents per share. This downside could be attributed to weakness in the Rig Technologies and the Completion & Production Solutions units, partially offset bybetter-than-expected revenues from the Wellbore Technologies unit.

Total revenues of $1.33 billion were in line with the Zacks Consensus Estimate. However, the top line plunged 41.6% from the year-ago number of $2.28 billion.

Segmental Performance

Rig Technologies: Revenues summed $437 million, which missed the Zacks Consensus Estimate of $457 million and also compared unfavorably with the year-ago quarter’s $759 million, thanks to a drop in drilling operations, which induced lower capital equipment backlog. The unit’s adjusted EBITDA of $19 million decreased from the year-earlier quarter’s $112 million.

Wellbore Technologies: Segmental revenues of $373 million outpaced the Zacks Consensus Estimate of $370 million but fell 51.2% year over year. The outperformance was led by improved drilling operations in North America, partially offset by weakness in the international and offshore markets. Further, the unit’s adjusted EBITDA of $12 million deteriorated from the prior-year’s $143 million.

Completion & Production Solutions: Revenues of $546 million missed the Zacks Consensus Estimate of $559 million and also dropped 31.7% from $799 million in the year-earlier quarter. This downside could be attributed to lower backlog and logistical troubles from coronavirus-induced restrictions. The unit recorded adjusted EBITDA of $28 million, down from the year-ago figure of $96 million.

NOV Inc. Price, Consensus and EPS Surprise

NOV Inc. Price, Consensus and EPS Surprise
NOV Inc. Price, Consensus and EPS Surprise

NOV Inc. price-consensus-eps-surprise-chart | NOV Inc. Quote


Capital equipment order backlog for Rig Technologies was $2.7 billion as of Dec 31, 2020 including $190 million worth of new orders.

The Completion & Production Solutions’ backlog for capital equipment orders totalled $696 million at the end of the fourth quarter comprising $215 million of new orders.

Balance Sheet

As of Dec 31, 2020, the company had cash and cash equivalents of $1.69 billion and a long-term debt of $1.83 billion. The total debt-to-total capitalization was 25.8%. The company has $2 billion available under its revolving credit facility

Zacks Rank & Key Picks

National Oilwell carries a Zacks Rank #3 (Hold), currently. Some better-ranked players in the energy space are DCP Midstream Partners, LP DCP, Plains Group Holdings, L.P. PAGP and Matador Resources Company MTDR, each presently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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