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National Oilwell Varco Is Losing More Revenue than Its Peers

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Dec. 4 2020, Updated 10:52 a.m. ET

Comparing revenue growth

In this article, we’ll discuss how our four oilfield equipment and services (or OFS) companies have fared in terms of revenue growth in 4Q16 compared to 4Q15. We’ll also look at these companies’ 2016 annual revenue rises compared to 2015.

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Schlumberger was the holdout

Schlumberger (SLB) registered the lowest revenue fall in the group. It recorded an ~8% revenue fall in 4Q16 to ~$7.1 billion, compared to ~$7.8 billion a year earlier. From 2015 to 2016, Schlumberger’s revenue fall was also the lowest in the group.

In 2016, SLB’s revenue fell 21% to $27.9 billion. Lower upstream activity in Latin America and seasonal upstream activity falls in the Europe/CIS (Commonwealth of Independent States)/Africa region reduced SLB’s revenue. SLB makes up 0.6% of the iShares Core S&P 500 ETF (IVV). Read Market Realist’s Why Did Schlumberger’s 4Q16 Earnings Beat Estimates? to know more.

The laggards

Halliburton’s (HAL) 4Q16 revenue fell ~21% to $4.0 billion, compared to ~$5.1 billion a year ago. On an annual basis, HAL’s 2016 revenue fell ~33% to $15.9 billion compared to a year earlier. Its revenue fell mostly due to seasonality in its pipeline and process services business, reduced cementing activity in a number of its international territories, and fewer completion tools sales in Europe/CIS/Africa.

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Baker Hughes (BHI) recorded a 29% revenue fall in 4Q16 compared to the previous year’s quarter. Its 4Q16 revenue was ~$2.4 billion, compared to ~$3.4 billion a year earlier. In 2016, BHI’s revenue fell 37% to $9.8 billion. Upstream project delays and difficult labor environments in its North Sea offshore projects in Europe affected BHI’s revenue negatively.

National Oilwell Varco was the most affected

National Oilwell Varco (NOV) recorded a ~38% revenue fall in 4Q16 compared to the previous year’s quarter. Its 4Q16 revenue was ~$1.7 billion, compared to ~$2.7 billion a year earlier. In 2016, NOV’s revenue fell ~51% to $7.2 billion compared to 2015. Lower revenues in all of NOV’s operating segments resulted in the company’s overall revenue fall.

We’ll look at these companies’ earnings growth figures in the following article.

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