National Oilwell Varco’s operating cash flow and capex
National Oilwell Varco’s free cash flow
NOV’s capex fell 44% between 2Q16 and 2Q17. Lower capex, coupled with higher CFO, resulted in its FCF (free cash flow) rising 145%. In 2Q17, NOV’s FCF was $125 million, an improvement from 1Q17.
Peers’ free cash flow
Lower-market-cap peer Superior Energy Services (SPN) generated $24 million in FCF in 2Q17, whereas Nabors Industries’ (NBR) FCF was -$101 million and McDermott International’s (MDR) FCF was $23.6 million. National Oilwell Varco makes up 0.06% of the SPDR S&P 500 ETF (SPY). SPY tracks the price and yield performance of the S&P 500 (SPX-INDEX).
In 1H17, National Oilwell Varco spent $82 million on acquisitions, and in 2Q17, it invested $76 million on five technology acquisitions focused on directional drilling and completion tools. Next, we’ll discuss National Oilwell Varco’s debt profile.