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How Did National Oilwell Varco Do Compared to the Others?

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Comparing revenue growth

In this part of the series, we’ll see how our four oilfield services (or OFS) companies fared in terms of revenue growth last quarter.

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Schlumberger was the holdout

Schlumberger (SLB) registered the lowest revenue decline in the group. It recorded a 36% revenue fall in fiscal 1Q16 compared to the year-ago quarter. Its fiscal 1Q16 revenue was $6.5 billion compared to $10.2 billion a year earlier. SLB’s Production segment witnessed the highest revenue decline, falling 36.6%. Its Reservoir Characterization segment was more resilient with a fall of 34% from fiscal 1Q15 to fiscal 1Q16.

SLB’s revenues in fiscal 1Q16 declined for the following reasons:

  • persistent pricing pressure for SLB’s products and services in North America
  • lower drilling activity
  • project completion slowdown in a number of operating regions

SLB is 6.5% of the ProShares Ultra Oil & Gas ETF (DIG). Read Market Realist’s series After Schlumberger’s Lower Earnings, What’s on the Horizon? to know more about Schlumberger.

The laggards

Halliburton’s (HAL) fiscal 1Q16 revenue fell ~41% to $4.2 billion from $7.1 billion a year ago. Revenues decreased primarily due to the US rig count fall, the slowdown in North American drilling operations, and pricing pressure on HAL’s products and services. HAL’s Completion and Production segment suffered the most in fiscal 1Q16, declining 45% from a year ago.

Baker Hughes (BHI) recorded a 42% revenue decline in fiscal 1Q16 compared to the year-ago quarter. Its fiscal 1Q16 revenue was $2.7 billion compared to $4.6 billion a year earlier. Baker Hughes’s North America operations suffered the highest revenue decline of 59%. Its Industrial Services segment was the most resilient with a fall of 14% in fiscal 1Q16 compared to fiscal 1Q15.

National Oilwell Varco was the most affected

National Oilwell Varco (NOV) recorded a revenue decline of ~55% in fiscal 1Q16 compared to the year-ago quarter. Its fiscal 1Q16 revenue was $2.2 billion compared to $4.8 billion a year earlier. NOV’s Rig Systems segment suffered the highest revenue decline of 63%. Its Completion & Production Solutions segment was more resilient with a fall of 41%. NOV’s revenues declined primarily due to lower spare parts sales and work suspension with NOV’s key customer in Brazil.

We’ll look at the earnings growth figures for these companies in the next part of this series.

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