NOV Q3 2015 earnings

National Oilwell Varco, has reported that for its third quarter ended September 30, 2015, it earned net income of US$155 million, or US$0.41 per fully diluted share, compared to second quarter ended June 30, 2015 net income of US$289 million, or US$0.74 per fully diluted share. Excluding other items and non-recurring charges from all periods, third quarter net income was US$232 million, or US$0.61 per fully diluted share, compared to US$0.77 in the second quarter of 2015 and US$1.62 in the third quarter of 2014. Third quarter 2015 other items were US$55 million in pre-tax intangible asset impairment charges and US$57 million in pre-tax severance, facility closure, and other charges.

Decrease in revenue

Revenues for the third quarter of 2015 were US$3.31 billion, a decrease of 15% from the second quarter of 2015 and a decrease of 41% from the third quarter of 2014. Operating profit for the quarter, excluding the other items, was US$346 million, or 10.5% of sales. EBITDA, excluding other items, was US$511 million, or 15.5% of sales, down 19% sequentially and 58% from the prior year. Operating leverage, or the change in operating profit divided by the change in revenue, excluding other items, was 18% from the second quarter of 2015 to the third quarter of 2015. SG&A expenses declined 15% sequentially and 34% from the third quarter of last year.

During the third quarter of 2015, the Company completed its share repurchase programme repurchasing and retiring 10.85 million shares of its common stock at an average price of US$40.98 per share for a total purchase price of US$444 million. Since initiating the share buyback program in September 2014, the Company repurchased 55.6 million shares, or 13% of its shares outstanding.

Ending backlog for the third quarter of 2015 was US$8.02 billion for the Company’s Rig Systems segment and US$1.17 billion for the Company’s Completion & Production Solutions segment.

Clay C. Williams, Chairman, President and CEO of National Oilwell Varco, stated, “The sharp decline in oil prices and activity since late last year has impacted each of our segments, and will drive activity lower in the fourth quarter. We believe our strong financial resources will enable National Oilwell Varco to invest in the extraordinary opportunities that will arise from this downturn, and we expect to emerge with greater capability and efficiency. In the meantime, with limited visibility into the timing of a recovery, we remain focused on managing costs and improving performance, while continuing to develop technologies that help our customers to improve their returns in a lower commodity price world.”

Read the article online at: https://www.oilfieldtechnology.com/drilling-and-production/28102015/nov-q3-2015-earnings/