NOV Reports Fourth Quarter and Full Year 2020 Results
NOV reported fourth quarter 2020 revenues of $1.33 billion, down 4% sequentially and 42% year-over-year. The company incurred a net loss of $347 million, or -26.1% of sales, influenced by non-cash charges of $236 million. Full-year revenues stood at $6.09 billion with a net loss of $2.54 billion, or $6.62 per share. Despite challenges, NOV generated $700 million in free cash flow and significantly reduced costs. Looking ahead, the company anticipates improvements in the second half of 2021, driven by rising commodity prices and increased drilling activity.
- Generated $700 million in free cash flow.
- Reduced annual fixed costs by several hundred million dollars.
- Improved new orders booked by 27% sequentially to $215 million.
- Fourth quarter revenues decreased 42% year-over-year.
- Net loss for 2020 was $2.54 billion.
- Significant operating loss of $2.43 billion for the full year.
NOV Inc. (NYSE: NOV) today reported fourth quarter 2020 revenues of
Revenues for the full year 2020 were
“Throughout a year in which the petroleum industry faced historic challenges, our team successfully generated
“During the fourth quarter, rising oilfield activity and revenues in North America were not enough to offset the declines in international and offshore markets, as customers continued to defer purchases and project approvals. However, while we expect the next two quarters will remain challenging, steadily improving commodity prices, rising North American drilling activity, encouraging news from global vaccination efforts, gradually reopening economies, and increasing interest in offshore wind energy should lead to rising orders for NOV as the year progresses. We are optimistic that the petroleum industry will realize a meaningful recovery in the second half of the year.”
Wellbore Technologies
Wellbore Technologies generated revenues of
Completion & Production Solutions
Completion & Production Solutions generated revenues of
New orders booked improved 27 percent sequentially to
Rig Technologies
Rig Technologies generated revenues of
New orders booked during the quarter totaled
Other Corporate Items
During the fourth quarter, the Company recognized
As of December 31, 2020, the Company had total debt of
Significant Achievements
NOV continues to solidify its position as the market leader in the offshore wind turbine installation vessel market. In the fourth quarter, NOV secured awards for the design and jacking systems for the first U.S.-built, Jones Act-compliant offshore wind turbine installation vessel. NOV also secured a crane upgrade order for a customer who is upgrading an existing vessel’s capacity for the heavier weights of the larger, next generation of offshore wind turbines. Additionally, NOV recently won an award from a European contractor for the design, jacking system and cranes for another wind turbine installation vessel.
NOV recently completed the installation of TK™-Liner systems for two geothermal wells in Holland. TK™-Liner is a high-performance glass-reinforced epoxy lining system designed to protect new and used tubulars in corrosive environments. Following the successful delivery and installation of these two systems, the customer placed additional orders for delivery in the first half of 2021.
NOV continues to expand its digital presence in the global completions market with updates to its CTES™ Cerberus™ and OrionNET™ software systems. The market-leading solutions are used to model fatigue life, tubing forces, and hydraulics in coiled tubing, wireline and jointed pipe operations. Improved cloud functionality enables better use of real-time data from remote operations by engineers in the field as well as in the office, enhancing operational efficiencies and well productivity through improved analysis and decision making.
Adoption of NOV’s SelectShift™ drilling motor technology accelerated meaningfully in the fourth quarter. More customers are realizing the benefit of the tool’s ability to change bend settings quickly and reliably while downhole. NOV also recently introduced the SelectShift™ 1,000, which combines the versatility of SelectShift™ with an all-new ERT™ power section capable of delivering an industry-leading 1,000 horsepower to the drill bit.
NOV’s Vector™ Series 40 drilling motor with an ERT™ power section was used in combination with a rotary steerable system to drill a record lateral in Northeastern U.S. during the quarter. The motor and power section enabled a customer to drill the longest single run lateral in the Marcellus to date.
NOV secured an order for two 1,000-horsepower land rig packages to a customer in the Middle East. The rigs are equipped with fully-automated pipe-handling systems, NOVOS™ drilling automation and the Maestro™ Power Management system, which uses data acquired through NOVOS™ to optimize the power consumption and load balancing of the rig components throughout the drilling process, resulting in significant fuel consumption savings.
NOV’s Quality Tubing™ 2.625-inch ATP-130 coiled tubing string set a performance record in the Permian Basin. The string completed 64 runs on 48 jobs and reached 1,266,489 running feet before our customer retired the string, making it NOV’s most successful 2.625-inch string. NOV also manufactured two of the longest Quality Tubing™ 2.875-inch outside diameter coiled tubing strings in its history for a valued customer in the Middle East. The 2.875-inch strings measure greater than 30,000 feet in length, which equates to over 5½ miles of continuously milled coiled tubing, weighing approximately 214,000 pounds per string.
NOV successfully installed and commissioned a TruScope A/S™ inspection system for a leading materials research institution in Asia. This high-speed tubular inspection system combines ultrasonic and electromagnetic test methods for the detection of tube body defects. In a single pass, the system detects, evaluates, and classifies transverse, longitudinal, and oblique internal and external flaws as well as wall thickness variations and laminations.
NOV won several orders for its glass-reinforced epoxy (“GRE”) products. NOV successfully signed a contract with a major shipbuilder in Asia to provide ballast, sea water, and marine growth prevention system GRE lines for a Floating Production Storage and Offloading (FPSO) vessel that will be used in Brazil. NOV also won awards to supply the topside GRE piping for the seawater, drain, and produced water systems for an FPSO in Guyana and GRE piping for the seawater and drain systems for an offshore platform in Asia.
Fourth Quarter Earnings Conference Call
NOV will hold a conference call to discuss its fourth quarter 2020 results on February 5, 2021 at 10:00 AM Central Time (11:00 AM Eastern Time). The call will be broadcast simultaneously at www.nov.com/investors. A replay will be available on the website for 30 days.
About NOV
NOV (NYSE: NOV) delivers technology-driven solutions to empower the global energy industry. For more than 150 years, NOV has pioneered innovations that enable its customers to safely produce abundant energy while minimizing environmental impact. The energy industry depends on NOV’s deep expertise and technology to continually improve oilfield operations and assist in efforts to advance the energy transition towards a more sustainable future. NOV powers the industry that powers the world.
Visit www.nov.com for more information.
Cautionary Statement for the Purpose of the “Safe Harbor” Provisions of the Private Securities Litigation Reform Act of 1995
Statements made in this press release that are forward-looking in nature are intended to be “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934 and may involve risks and uncertainties. These statements may differ materially from the actual future events or results. Readers are referred to documents filed by NOV with the Securities and Exchange Commission, including the Annual Report on Form 10-K, which identify significant risk factors which could cause actual results to differ from those contained in the forward-looking statements.
Certain prior period amounts have been reclassified in this press release to be consistent with current period presentation.
NOV INC. |
||||||||||||||||||||
CONSOLIDATED STATEMENTS OF INCOME (LOSS) (Unaudited) |
||||||||||||||||||||
(In millions, except per share data) |
||||||||||||||||||||
|
|
Three Months Ended |
|
Years Ended |
||||||||||||||||
|
|
December 31, |
|
September 30, |
|
December 31, |
||||||||||||||
|
|
2020 |
|
2019 |
|
2020 |
|
2020 |
|
2019 |
||||||||||
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Wellbore Technologies |
|
$ |
373 |
|
|
$ |
764 |
|
|
$ |
361 |
|
|
$ |
1,867 |
|
|
$ |
3,214 |
|
Completion & Production Solutions |
|
|
546 |
|
|
|
799 |
|
|
|
601 |
|
|
|
2,433 |
|
|
|
2,771 |
|
Rig Technologies |
|
|
437 |
|
|
|
759 |
|
|
|
449 |
|
|
|
1,919 |
|
|
|
2,682 |
|
Eliminations |
|
|
(29 |
) |
|
|
(41 |
) |
|
|
(27 |
) |
|
|
(129 |
) |
|
|
(188 |
) |
Total revenue |
|
|
1,327 |
|
|
|
2,281 |
|
|
|
1,384 |
|
|
|
6,090 |
|
|
|
8,479 |
|
Gross profit (loss) |
|
|
(66 |
) |
|
|
376 |
|
|
|
139 |
|
|
|
434 |
|
|
|
845 |
|
Gross profit (loss) % |
|
|
-5.0 |
% |
|
|
16.5 |
% |
|
|
10.0 |
% |
|
|
7.1 |
% |
|
|
10.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Selling, general, and administrative |
|
|
235 |
|
|
|
289 |
|
|
|
213 |
|
|
|
968 |
|
|
|
1,303 |
|
Long-lived asset impairment |
|
|
— |
|
|
|
436 |
|
|
|
— |
|
|
|
1,891 |
|
|
|
5,821 |
|
Operating loss |
|
|
(301 |
) |
|
|
(349 |
) |
|
|
(74 |
) |
|
|
(2,425 |
) |
|
|
(6,279 |
) |
Interest and financial costs |
|
|
(19 |
) |
|
|
(25 |
) |
|
|
(21 |
) |
|
|
(84 |
) |
|
|
(100 |
) |
Interest income |
|
|
2 |
|
|
|
4 |
|
|
|
— |
|
|
|
7 |
|
|
|
20 |
|
Equity loss in unconsolidated affiliates |
|
|
(10 |
) |
|
|
(7 |
) |
|
|
(11 |
) |
|
|
(260 |
) |
|
|
(13 |
) |
Other income (expense), net |
|
|
2 |
|
|
|
(54 |
) |
|
|
(8 |
) |
|
|
(17 |
) |
|
|
(90 |
) |
Loss before income taxes |
|
|
(326 |
) |
|
|
(431 |
) |
|
|
(114 |
) |
|
|
(2,779 |
) |
|
|
(6,462 |
) |
Provision (benefit) for income taxes |
|
|
22 |
|
|
|
(46 |
) |
|
|
(61 |
) |
|
|
(242 |
) |
|
|
(369 |
) |
Net loss |
|
|
(348 |
) |
|
|
(385 |
) |
|
|
(53 |
) |
|
|
(2,537 |
) |
|
|
(6,093 |
) |
Net (income) loss attributable to noncontrolling interests |
|
|
(1 |
) |
|
|
— |
|
|
|
2 |
|
|
|
5 |
|
|
|
2 |
|
Net loss attributable to Company |
|
$ |
(347 |
) |
|
$ |
(385 |
) |
|
$ |
(55 |
) |
|
$ |
(2,542 |
) |
|
$ |
(6,095 |
) |
Per share data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Basic |
|
$ |
(0.90 |
) |
|
$ |
(1.01 |
) |
|
$ |
(0.14 |
) |
|
$ |
(6.62 |
) |
|
$ |
(15.96 |
) |
Diluted |
|
$ |
(0.90 |
) |
|
$ |
(1.01 |
) |
|
$ |
(0.14 |
) |
|
$ |
(6.62 |
) |
|
$ |
(15.96 |
) |
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Basic |
|
|
385 |
|
|
|
382 |
|
|
|
385 |
|
|
|
384 |
|
|
|
382 |
|
Diluted |
|
|
385 |
|
|
|
382 |
|
|
|
385 |
|
|
|
384 |
|
|
|
382 |
|
NOV INC. |
||||||
CONSOLIDATED BALANCE SHEETS (Unaudited) |
||||||
(In millions) |
||||||
|
|
December 31, |
||||
|
|
2020 |
|
2019 |
||
ASSETS |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
1,692 |
|
$ |
1,171 |
Receivables, net |
|
|
1,274 |
|
|
1,855 |
Inventories, net |
|
|
1,408 |
|
|
2,197 |
Contract assets |
|
|
611 |
|
|
643 |
Other current assets |
|
|
224 |
|
|
247 |
Total current assets |
|
|
5,209 |
|
|
6,113 |
|
|
|
|
|
|
|
Property, plant and equipment, net |
|
|
1,927 |
|
|
2,354 |
Lease right-of-use assets |
|
|
566 |
|
|
674 |
Goodwill and intangibles, net |
|
|
2,020 |
|
|
3,659 |
Other assets |
|
|
207 |
|
|
349 |
Total assets |
|
$ |
9,929 |
|
$ |
13,149 |
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Accounts payable |
|
$ |
489 |
|
$ |
715 |
Accrued liabilities |
|
|
863 |
|
|
949 |
Contract liabilities |
|
|
354 |
|
|
427 |
Current portion of lease liabilities |
|
|
110 |
|
|
114 |
Accrued income taxes |
|
|
51 |
|
|
42 |
Total current liabilities |
|
|
1,867 |
|
|
2,247 |
|
|
|
|
|
|
|
Long-term debt |
|
|
1,834 |
|
|
1,989 |
Lease liabilities |
|
|
612 |
|
|
674 |
Other liabilities |
|
|
337 |
|
|
393 |
Total liabilities |
|
|
4,650 |
|
|
5,303 |
|
|
|
|
|
|
|
Total stockholders’ equity |
|
|
5,279 |
|
|
7,846 |
Total liabilities and stockholders’ equity |
|
$ |
9,929 |
|
$ |
13,149 |
NOV INC. |
||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) |
||||||||
(In millions) |
||||||||
|
|
Years Ended |
||||||
|
|
December 31, |
||||||
|
|
2020 |
|
2019 |
||||
Cash flows from operating activities: |
|
|
||||||
Net loss |
|
$ |
(2,537 |
) |
|
$ |
(6,093 |
) |
Adjustments to reconcile net loss to net cash provided by operating activities: |
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
352 |
|
|
|
533 |
|
Goodwill and indefinite-lived intangible asset impairment |
|
|
1,378 |
|
|
|
3,612 |
|
Long-lived asset impairment |
|
|
513 |
|
|
|
2,209 |
|
Working capital and other operating items, net |
|
|
1,220 |
|
|
|
453 |
|
Net cash provided by operating activities |
|
|
926 |
|
|
|
714 |
|
|
|
|
|
|
|
|
||
Cash flows from investing activities: |
|
|
|
|
|
|
||
Purchases of property, plant and equipment |
|
|
(226 |
) |
|
|
(233 |
) |
Business acquisitions, net of cash acquired |
|
|
(14 |
) |
|
|
(180 |
) |
Other |
|
|
96 |
|
|
|
98 |
|
Net cash used in investing activities |
|
|
(144 |
) |
|
|
(315 |
) |
|
|
|
|
|
|
|
||
Cash flows from financing activities: |
|
|
|
|
|
|
||
Borrowings against lines of credit and other debt |
|
|
36 |
|
|
|
511 |
|
Payments against lines of credit and other debt |
|
|
(217 |
) |
|
|
(1,000 |
) |
Cash dividends paid |
|
|
(19 |
) |
|
|
(77 |
) |
Other |
|
|
(59 |
) |
|
|
(81 |
) |
Net cash used in financing activities |
|
|
(259 |
) |
|
|
(647 |
) |
Effect of exchange rates on cash |
|
|
(2 |
) |
|
|
(8 |
) |
Increase (decrease) in cash and cash equivalents |
|
|
521 |
|
|
|
(256 |
) |
Cash and cash equivalents, beginning of period |
|
|
1,171 |
|
|
|
1,427 |
|
Cash and cash equivalents, end of period |
|
$ |
1,692 |
|
|
$ |
1,171 |
|
NOV INC.
RECONCILIATION OF ADJUSTED EBITDA TO NET INCOME (LOSS) (Unaudited)
(In millions)
The Company discloses Adjusted EBITDA (defined as Operating Profit excluding Depreciation, Amortization and, when applicable, Other Items) in its periodic earnings press releases and other public disclosures to provide investors additional information about the results of ongoing operations. The Company uses Adjusted EBITDA internally to evaluate and manage the business. Adjusted EBITDA is not intended to replace GAAP financial measures, such as Net Income. Other Items include impairment charges, inventory charges and severance and other restructuring costs.
|
|
Three Months Ended |
|
Years Ended |
||||||||||||||||
|
|
December 31, |
|
September 30, |
|
December 31, |
||||||||||||||
|
|
2020 |
|
2019 |
|
2020 |
|
2020 |
|
2019 |
||||||||||
Operating profit (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Wellbore Technologies |
|
$ |
(78 |
) |
|
$ |
(317 |
) |
|
$ |
(50 |
) |
|
$ |
(858 |
) |
|
$ |
(3,551 |
) |
Completion & Production Solutions |
|
|
(31 |
) |
|
|
57 |
|
|
|
25 |
|
|
|
(977 |
) |
|
|
(1,934 |
) |
Rig Technologies |
|
|
(132 |
) |
|
|
(23 |
) |
|
|
(3 |
) |
|
|
(362 |
) |
|
|
(524 |
) |
Eliminations and corporate costs |
|
|
(60 |
) |
|
|
(66 |
) |
|
|
(46 |
) |
|
|
(228 |
) |
|
|
(270 |
) |
Total operating profit (loss) |
|
$ |
(301 |
) |
|
$ |
(349 |
) |
|
$ |
(74 |
) |
|
$ |
(2,425 |
) |
|
$ |
(6,279 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Other Items: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Wellbore Technologies |
|
$ |
46 |
|
|
$ |
410 |
|
|
$ |
26 |
|
|
$ |
849 |
|
|
$ |
3,794 |
|
Completion & Production Solutions |
|
|
43 |
|
|
|
13 |
|
|
|
23 |
|
|
|
1,132 |
|
|
|
2,042 |
|
Rig Technologies |
|
|
132 |
|
|
|
114 |
|
|
|
12 |
|
|
|
402 |
|
|
|
784 |
|
Corporate |
|
|
15 |
|
|
|
— |
|
|
|
1 |
|
|
|
40 |
|
|
|
11 |
|
Total Other Items |
|
$ |
236 |
|
|
$ |
537 |
|
|
$ |
62 |
|
|
$ |
2,423 |
|
|
$ |
6,631 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Depreciation & amortization: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Wellbore Technologies |
|
$ |
44 |
|
|
$ |
50 |
|
|
$ |
45 |
|
|
$ |
187 |
|
|
$ |
284 |
|
Completion & Production Solutions |
|
|
16 |
|
|
|
26 |
|
|
|
15 |
|
|
|
75 |
|
|
|
150 |
|
Rig Technologies |
|
|
19 |
|
|
|
21 |
|
|
|
19 |
|
|
|
77 |
|
|
|
87 |
|
Corporate |
|
|
3 |
|
|
|
3 |
|
|
|
4 |
|
|
|
13 |
|
|
|
12 |
|
Total depreciation & amortization |
|
$ |
82 |
|
|
$ |
100 |
|
|
$ |
83 |
|
|
$ |
352 |
|
|
$ |
533 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Adjusted EBITDA: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Wellbore Technologies |
|
$ |
12 |
|
|
$ |
143 |
|
|
$ |
21 |
|
|
$ |
178 |
|
|
$ |
527 |
|
Completion & Production Solutions |
|
|
28 |
|
|
|
96 |
|
|
|
63 |
|
|
|
230 |
|
|
|
258 |
|
Rig Technologies |
|
|
19 |
|
|
|
112 |
|
|
|
28 |
|
|
|
117 |
|
|
|
347 |
|
Eliminations and corporate costs |
|
|
(42 |
) |
|
|
(63 |
) |
|
|
(41 |
) |
|
|
(175 |
) |
|
|
(247 |
) |
Total Adjusted EBITDA |
|
$ |
17 |
|
|
$ |
288 |
|
|
$ |
71 |
|
|
$ |
350 |
|
|
$ |
885 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Reconciliation of Adjusted EBITDA: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
GAAP net income (loss) attributable to Company |
|
$ |
(347 |
) |
|
$ |
(385 |
) |
|
$ |
(55 |
) |
|
$ |
(2,542 |
) |
|
$ |
(6,095 |
) |
Noncontrolling interests |
|
|
(1 |
) |
|
|
— |
|
|
|
2 |
|
|
|
5 |
|
|
|
2 |
|
Provision (benefit) for income taxes |
|
|
22 |
|
|
|
(46 |
) |
|
|
(61 |
) |
|
|
(242 |
) |
|
|
(369 |
) |
Interest expense |
|
|
19 |
|
|
|
25 |
|
|
|
21 |
|
|
|
84 |
|
|
|
100 |
|
Interest income |
|
|
(2 |
) |
|
|
(4 |
) |
|
|
— |
|
|
|
(7 |
) |
|
|
(20 |
) |
Equity loss in unconsolidated affiliate |
|
|
10 |
|
|
|
7 |
|
|
|
11 |
|
|
|
260 |
|
|
|
13 |
|
Other (income) expense, net |
|
|
(2 |
) |
|
|
54 |
|
|
|
8 |
|
|
|
17 |
|
|
|
90 |
|
Depreciation and amortization |
|
|
82 |
|
|
|
100 |
|
|
|
83 |
|
|
|
352 |
|
|
|
533 |
|
Other Items |
|
|
236 |
|
|
|
537 |
|
|
|
62 |
|
|
|
2,423 |
|
|
|
6,631 |
|
Total Adjusted EBITDA |
|
$ |
17 |
|
|
$ |
288 |
|
|
$ |
71 |
|
|
$ |
350 |
|
|
$ |
885 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20210204006147/en/
FAQ
What are NOV's fourth quarter 2020 revenue figures?
What was NOV's net loss in the fourth quarter of 2020?
How did NOV's 2020 annual revenue compare to previous years?
What factors impacted NOV's financial performance in 2020?
When will NOV discuss its fourth quarter earnings results?
