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The Bottom May Be In For National Oilwell Varco

Nov. 06, 2017 8:55 AM ETNOV Inc. (NOV)5 Comments
Maltzberger profile picture


  • Company Financials Continue to Improve.
  • Low Crude Prices Resulted in New Equipment Cancellations.
  • Orders for Drilling Operations Equipment and Technologies Increased.

ChartNOV data by YCharts

National Oilwell Varco (NYSE:NOV), headquartered in Houston, provides equipment and components for oil and gas drilling, and operations, oilfield services, and supplies. The company has four divisions: Rig Systems, Rig Aftermarket, Wellbore Technologies, and Completion and Production Solutions. Rig Systems manufactures both land and offshore drilling rigs. Rig Aftermarket supports those units with spare parts, repair and leasing. Wellbore Technologies provides equipment used in drilling operations, as well as technologies that help optimize wellbore performance. The Completion and Production Solutions segment integrates technologies for well completions to oil and gas production.

Quarterly Update:

For its most recent quarter, the company had $1.84 billion in revenue, which was in-line with expectations, while EPS, at -$.07/share was a penny better than consensus. Sequentially and YoY revenue continues to improve as do earnings, as the company posted EPS of -$.14/share in Q2-17, and -$.34 in Q3-16.

However, it's where those revenues break out that tells the story. Here's how each of the segments performed as of the most recent quarter-end

Segment Q3-17 Revenue Q2-17 Revenue Q3-16 Revenue % Change YoY Revenu % Change QoQ Revenue
Rig Systems $330 $340 $470 -29.8% -4.6%

Rig Aftermarket

$311 $341 $322 -3.4% -8.8%
Wellbore Technologies $693 $614 $526 31.7% 12.9%
Completion & Production Solutions $682 $652 $543 25.6%


Eliminations -$181 -$194 -$215 -15.8% -6.7%
Total $1,835 $1,759 $1,646 11.5% 4.3%

As you can see, revenue related to capital equipment in the Rig Systems and the Rig Aftermarket segments have declined both YoY and sequentially, while the operation support segments of Wellbore Technologies and the Completion and Production Solutions segments showed strong growth.

So what happened here? Well, as oil prices started to decline in April, rig reactivations slowed, with domestic rig count peaking in July at 958 and declining to just

This article was written by

Maltzberger profile picture
As one of five kids born to working class parents I learned early and was reminded often about the value of a dollar. Dad could (and often did) fix or build anything and mom combined coupon clipping and hamburger helper to stretch the budget farther than anyone thought possible. I began investing what money I earned from painting houses and stocking shelves to pay my college tuition. I made mistakes along the way (and will again) but did ok and actually ended up with a small surplus after graduation. This pretty much sums it up for me in that "If it doesn't make money, it doesn't make cents."

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