NOV reports Q3 2022 earnings

“NOV’s third quarter results reflect solid execution and ongoing improvements in demand from both oil & gas and renewables markets,” stated Clay Williams, Chairman, President, and CEO. “Demand from international and offshore markets is building momentum, complementing what has already been a solid recovery in the North American land market. With international and North American revenues growing nine and ten percent, respectively, combined with strong growth from our energy transition initiatives, consolidated revenues improved nine percent sequentially. While supply chain disruptions and logistics friction remain a challenge, our team continued to improve execution to meet our customer’s needs, while working to grow profitability for our shareholders.”

“After years of underinvestment, global spare production capacity is at critically low levels. However, the petroleum industry’s ability to ramp activity quickly to respond to the emerging energy shortage remains limited by, among other factors, availability of the technology and the equipment we provide. With industry capital spending still below levels sufficient to meet the world’s energy needs, despite recessionary concerns, our outlook for continued rising demand for NOV’s energy technologies is very bright.”

Wellbore technologies

Wellbore technologies generated revenues of US$741 million in the third quarter of 2022, an increase of 11 percent from the second quarter of 2022 and an increase of 46 percent from the third quarter of 2021. Operating profit was US$74 million, or 10.0 percent of sales, and included US$31 million of Other Items. Adjusted EBITDA increased US$23 million sequentially and US$68 million from the prior year to US$145 million, or 19.6 percent of sales. Accelerating growth in international markets along with continued improvements in demand from North America led to the seventh straight quarter of improved results for the segment.

Completion & production solutions

Completion & production solutions generated revenues of US$681 million in the third quarter of 2022, an increase of 7 percent from the second quarter of 2022 and an increase of 42 percent from the third quarter of 2021. Operating profit was US$21 million, or 3.1 percent of sales, and included US$19 million in Other Items. Adjusted EBITDA increased US$24 million sequentially and US$61 million from the prior year to US$56 million, or 8.2 percent of sales. Continued improvements in execution and healthy demand drove improved results for the segment.

New orders booked during the quarter totalled US$493 million, representing a book-to-bill of 116 percent when compared to the US$425 million of orders shipped from backlog. As of 30 September 2022, backlog for capital equipment orders for Completion & production solutions was US$1.48 billion, an increase of 2 percent from the second quarter of 2022 and an increase of 34 percent from the third quarter of 2021.

Rig technologies

Rig technologies generated revenues of US$511 million in the third quarter of 2022, an increase of 11 percent from the second quarter of 2022 and an increase of 31 percent from the third quarter of 2021. Operating profit was US$22 million, or 4.3 percent of sales, and included US$13 million of Other Items. Adjusted EBITDA increased US$11 million sequentially and US$27 million from the prior year to US$52 million, or 10.2 percent of sales. Accelerating revenue conversion from renewable energy projects and demand for the segment’s aftermarket parts and services drove the improvement in results.

New capital equipment orders booked during the quarter totalled US$119 million, and backlog for capital equipment orders for rig technologies totalled US$2.78 billion as of 30 September 2022.

Corporate information

During the third quarter, the company recognised US$63 million of Other Items associated with classifying the company’s Russian operations as assets held for sale and the loss on sale of its Belarusian business (including the businesses’ cumulative foreign currency translation adjustments), partially offset by credits related to gains on sales of previously reserved inventory (see Reconciliation of Adjusted EBITDA to Net Income (Loss)).

Cash flow used in operations was US$106 million for the quarter driven by the funding of working capital to support growth of the business.

As of 30 September 2022, the company had total debt of US$1.73 billion, with US$2.00 billion available on its primary revolving credit facility, and US$1.00 billion in cash and cash equivalents.

Read the article online at: https://www.oilfieldtechnology.com/drilling-and-production/31102022/nov-reports-q3-2022-earnings/