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Analyzing National Oilwell Varco’s Net Debt after 1Q17

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National Oilwell Varco’s net debt

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National Oilwell Varco’s indebtedness

National Oilwell Varco’s total debt decreased ~5% in 1Q17 over 1Q16. Its cash and marketable securities decreased 13% during the same period. In effect, its net debt increased marginally in the past year.

Compared to 4Q16, NOV’s net debt actually decreased. From 1Q15 through 4Q15, NOV’s net debt had increased significantly before it started declining.

NOV’s trailing-12-month (or TTM) EBITDA[1. earnings before interest, tax, depreciation, and amortization] turned negative in 1Q17. So, the company’s net debt-to-EBITDA ratio (or indebtedness) was not meaningful in 1Q17. EBITDA is a measure of operating income.

National Oilwell Varco comprises 0.06% of the iShares Russell 1000 ETF (IWB).

Net debt for NOV’s peers

On April 5, 2017, Tidewater (TDW) agreed to a short-term covenant waiver, as discussions with principal lenders and noteholders continued regarding TDW’s various debt arrangements. Tidewater, an offshore service vessel provider to the offshore energy producers, had already received an extension of debt covenant compliance waivers until March 27, 2017.

Tidewater’s net debt was ~$1.4 billion in 4Q16. Read more on TDW’s debt covenant–related issues in Market Realist’s Did Tidewater’s Waiver Extension Revive the Market’s Outlook? Weatherford International’s (WFT) net debt was ~$7 billion in 1Q17, while Nabors Industries’ (NBR) net debt was $3.4 billion.

You can learn more about the OFS industry in The Oilfield Equipment and Services Industry: A Primer.

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