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Why National Oilwell Varco’s 4Q17 Earnings Matched Estimates

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National Oilwell Varco’s 4Q17 revenue

National Oilwell Varco (NOV) released its 4Q17 and 2017 financial results on February 5, 2018. The company recorded total revenue of ~$2.0 billion in 4Q17, up 16.4% compared to ~$1.7 billion in 4Q16.

Compared to 3Q17, National Oilwell Varco’s revenue rose 7.3%. Improved revenues in the company’s Wellbore Technologies and Completion & Production Solutions segments led to its overall revenue growth in 4Q17.

In comparison, the 4Q17 revenue of Weatherford International (WFT), NOV’s lower-market-cap peer, rose 2.1% over 3Q17, while Halliburton’s (HAL) revenue rose 9% during the same period. Read more about HAL’s 4Q17 earnings in Market Realist’s What Worked for Halliburton in Its 4Q17 Earnings?

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National Oilwell Varco’s 4Q17 earnings

National Oilwell Varco’s 4Q17 adjusted net EPS (earnings per share) were -$0.04. This result nearly matched sell-side analysts’ consensus EPS estimate. Despite higher operating profits in the Wellbore Technologies and Completion & Production Solutions segments, weakness in offshore operations kept NOV’s adjusted earnings tied to analysts’ estimates.

Compared to 4Q16, NOV was able to cut its adjusted losses significantly in 4Q17. On average, its adjusted EPS have exceeded the consensus EPS estimates by ~11% over the past 13 quarters.

National Oilwell Varco makes up 4.7% of the VanEck Vectors Oil Services ETF (OIH), an ETF tracking an index of 25 oilfield equipment and services companies. Since February 6, 2017, OIH has fallen 21% compared to the 9.6% fall in NOV’s stock price.

How did NOV do in 2017?

In 2017, National Oilwell Varco’s revenue rose 1% compared to 2016. Its net income, however, improved significantly during the period. In 2017, NOV’s net income was -$237 million, and it was -$2.4 billion in 2016. In 2016, NOV’s net income was reduced by a $972 million pretax impairment charge.

Next, we’ll discuss NOV’s growth drivers and operating income.

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