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NOV Missed Q3 EPS Estimates: Stock Fell 5.4% in After-Hours Trade

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NOV’s Q3 results

National Oilwell Varco (NOV) reported its third-quarter earnings on October 25 after the markets closed. The company’s reported EPS of $0.00 missed analysts’ estimates of $0.12 for the quarter. NOV’s EPS in Q3 2017 was -$0.07. National Oilwell Varco also missed its Q3 revenue estimates by 2.5%. The stock fell 5.4% in after-hours trading.

National Oilwell Varco’s Q3 revenue rose 2% sequentially and 17% YoY. The company’s adjusted EBITDA rose 8% sequentially and 47% YoY.

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Earnings drivers

“Our revenues and Adjusted EBITDA continued to grow in the third quarter, underpinned by higher sequential demand for downhole tools, drill pipe, and wellsite services in support of drilling operations globally,” commented Clay Williams, chair, president, and CEO.

However, softness in completions activity in North America impacted NOV’s well-stimulation equipment sales during the quarter. Softness in completions activity in North America impacted Halliburton’s (HAL) and TechnipFMC’s (FTI) Q3 performance as well. Similarly, international operations drove Schlumberger’s (SLB) earnings in the third quarter.

Expectations for 2019

Similar to peers, National Oilwell Varco cited logistical constraints and exhaustion of capital budgets as the reasons for slower activity in North America. The company expects improved activity in 2019.

“During the third quarter we saw rising demand for conductor pipe connections—a leading indicator of future offshore wells—as well as increased inquiries around offshore rig reactivations, pointing to more offshore activity ahead,” noted Williams.

For the latest earnings coverage on the energy sector, read Market Realist’s Energy and Power page.

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