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National Oilwell Varco’s Outlook for 3Q17

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Does National Oilwell management see a recovery in 2017?

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Agreement with Transocean

On July 28, 2017, National Oilwell Varco signed an agreement with rig contractor Transocean (RIG) to provide drill-floor equipment services on 15 Transocean drilling rigs. In the company’s 2Q17 call, National Oilwell Varco chief financial officer Jose Bayardo stated that “we recently signed a 10-year service and support agreement with Transocean for 15 drilling rigs. The goal for both parties is to lower total cost of ownership and maximize equipment uptime by fully leveraging NOV’s leading drilling technologies, global aftermarket service and repair capabilities and data-driven solutions.” National Oilwell Varco makes up 0.05% of the iShares Russell 1000 ETF (IWB). IWB has risen 13% in the last year, whereas NOV has fallen 9%.

National Oilwell Varco’s expectations: 3Q17 versus 2Q17

  • Rig Systems segment’s revenue to rise
  • Rig Aftermarket segment to see incremental margin and revenue growth
  • Completion & Production Solutions segment’s offshore business to fall
  • Completion & Production Solutions segment’s onshore business revenue to rise 3%–5%
  • Completion & Production Solutions segment’s onshore margins to narrow 1%–2%

Next, we’ll discuss National Oilwell Varco’s revenue and earnings.

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