NOV Reports Second Quarter 2021 Results
NOV reported second quarter 2021 revenues of $1.42 billion, a 13% increase from Q1 2021 but a 5% decrease year-over-year. The company experienced a net loss of $26 million, or 1.8% of sales, with significant pre-tax net charges. Adjusted EBITDA rose to $104 million, or 7.3% of sales. Strong demand in oilfield and offshore wind markets pushed orders above 100%. The company faced challenges from ongoing supply chain disruptions but is optimistic about future growth driven by technology advancements in conventional and clean energy sectors. Cash flow from operations was $177 million.
- Second quarter revenues increased 13% quarter-over-quarter.
- Adjusted EBITDA rose to $104 million or 7.3% of sales.
- Both Rig Technologies and Completion & Production Solutions segments reported book-to-bill ratios over 100%.
- Strong demand for Wellbore Technologies led to double-digit revenue growth.
- Net loss of $26 million reflects ongoing market challenges.
- Completion & Production Solutions saw a 19% revenue decrease year-over-year.
- Government-mandated shutdowns are disrupting global supply chains.
NOV Inc. (NYSE: NOV) today reported second quarter 2021 revenues of
“Rising demand in oilfield and offshore wind markets led to stronger orders for NOV during the second quarter,” stated Clay Williams, Chairman, President and CEO. “Both Rig Technologies and Completion & Production Solutions segments posted book-to-bill ratios north of
“While our second quarter financial results continued to reflect 2020’s historic decline in oilfield activity and orders, we are encouraged by rising inquiries and activity, and we believe post-pandemic global economic recovery will spur further top-line growth. In the meantime, government-mandated shutdowns continue to disrupt global supply chains, limit raw material availability, and pose challenges for our workforce. NOV did a better job navigating these headwinds in the second quarter, while continuing to advance the Company’s leading-edge technology offerings for the oilfield and renewables markets. NOV’s portfolio of newly-developed technologies positions the Company well to take advantage of what we believe is the beginning of a multi-year growth market for both conventional and clean energy technologies.”
Wellbore Technologies
Wellbore Technologies generated revenues of
Completion & Production Solutions
Completion & Production Solutions generated revenues of
New orders booked during the quarter totaled
Rig Technologies
Rig Technologies generated revenues of
New orders booked during the quarter totaled
Other Corporate Items
During the second quarter, the Company recognized
Cash flow provided by operations for the second quarter was
Significant Achievements
NOV continued its expansion into the offshore wind energy market, utilizing the Company’s expertise in heavy lift and marine design to accelerate the evolution of the next generation of offshore wind equipment. During the quarter, NOV signed a contract for the design and jacking systems for a European client’s new wind installation vessel in addition to a contract for a heavy lift crane upgrade to an existing wind installation vessel that will give it the capability to install next-generation wind turbines. NOV also successfully tested its new in-line chain tensioner that facilitates the offloading of floating wind turbines as well as the mooring operations of FPSO systems, which led to a subsequent project award.
NOV continues to drive innovation in the managed pressure drilling (MPD) market and delivered its first project that integrates the NOVOS™ drilling system and the MPowerD™ MPD system, which enables the automation of multiple drilling sequences with precise pressure control, creating significant drilling time efficiencies while also fostering a safer drilling process. The success of this initial project, which utilized our single-choke 1500SE system, led to an award of three additional packages, for which NOV will provide field operations support, MPD planning advisory, and its 1500SE system.
NOV continued to expand its market with the Company’s growing portfolio of products that enable customers to reduce their carbon footprint while improving economics. NOV worked with a customer to design and deliver a proprietary system that automatically tilts and orients a sailing mast, improving the efficiencies of sails on large vessels. The initial application of this system is for a large cruise ship but can also be used on large cargo vessels. The wind propulsion technology will supplement conventional propulsion systems and is expected to reduce the ship’s carbon footprint by 40 to
NOV received a contract award to supply a large submerged turret production (STP) system for a floating production storage and offloading (FPSO) vessel in the Barossa gas field offshore of Australia. NOV’s STP system with swivel is designed for high pressures, temperatures, and volumes to transfer all fluids, data, and power between the subsea system and the FPSO, which is designed for a 25-year life of uninterrupted operation without drydocking.
NOV secured a repeat order for our PowerBlade™ hybrid energy storage and regeneration system, which provides up to a
NOV delivered the industry’s first 3 million-pound, 20,000 psi-rated landing string. NOV worked closely with its customers for more than six years to develop a product that meets the offshore market’s most challenging needs. Designed to provide higher tensile capacity, increased elevator capacity, and greater slip-crushing resistance, Grant Prideco™ landing strings are optimized to provide the highest-possible tensile strength to enable running and landing casing and other heavy equipment on offshore wells, particularly in deep water.
NOV technology continued to enable geothermal operators to overcome some of the most challenging drilling conditions. An initial run using ReedHycalog’s™ PDC ION+™ 3D shaped cutters significantly exceeded a key customer’s expectations in an ultrahard rock formation, resulting in the customer’s decision to utilize NOV’s bits on all wells in their critical geothermal research project that will be drilled in the second half of 2021.
NOV won a large contract to supply 59,875 ft of TK-Liner for geothermal wells in the Netherlands. In the past three years, Tuboscope has provided more than 70,000 ft of large-diameter TK-Liner products for the Netherlands’ geothermal market. Available in a variety of connection options, this engineered system is proven to prevent corrosion, reduce heat loss, and minimize friction.
NOV has secured orders for seawater treatment, gas dehydration, and produced water treatment modules for two separate FPSOs to be operated offshore Brazil. The orders demonstrate NOV’s ability to combine global process systems execution capabilities with local content, placing NOV in a strong position for a growing FPSO market in Brazil.
NOV offered the most efficient bit selection for an important drilling campaign in Oman. Our 17½-in. Falcon™ bit, featuring ION™-Alpha cutters, successfully drilled the entire 3,202-m section from shoe to total depth at a ROP of 104 ft/hr, beating the field’s previous best ROP performance by more than
NOV’s Subsea Production Systems business unit was awarded two large contracts in Brazil. The first contract includes 212 miles of flexible pipe for oil production, gas injection, water injection, and gas export. The pipe will be utilized in the Post-Salt Campos Basin as well as the Pre-Salt Santos Basin, where water depths range from 4,900 to 8,200 ft. The order, which also includes loading, storage, installation, and technical services, is the second largest contract in the history of the Subsea Production Systems business unit. Additionally, the second contract awarded in Brazil was for 57 miles of flexible gas lift risers.
Second Quarter Earnings Conference Call
NOV will hold a conference call to discuss its second quarter 2021 results on July 28, 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 |
|
Six Months Ended |
||||||||||||||||
|
|
June 30, |
|
March 31, |
|
June 30, |
||||||||||||||
|
|
2021 |
|
2020 |
|
2021 |
|
2021 |
|
2020 |
||||||||||
Revenue: |
|
|
|
|
|
|
|
|
|
|
||||||||||
Wellbore Technologies |
|
$ |
463 |
|
|
$ |
442 |
|
|
$ |
413 |
|
|
$ |
876 |
|
|
$ |
1,133 |
|
Completion & Production Solutions |
|
|
497 |
|
|
|
611 |
|
|
|
439 |
|
|
|
936 |
|
|
|
1,286 |
|
Rig Technologies |
|
|
487 |
|
|
|
476 |
|
|
|
431 |
|
|
|
918 |
|
|
|
1,033 |
|
Eliminations |
|
|
(30 |
) |
|
|
(33 |
) |
|
|
(34 |
) |
|
|
(64 |
) |
|
|
(73 |
) |
Total revenue |
|
|
1,417 |
|
|
|
1,496 |
|
|
|
1,249 |
|
|
|
2,666 |
|
|
|
3,379 |
|
Gross profit |
|
|
231 |
|
|
|
137 |
|
|
|
156 |
|
|
|
387 |
|
|
|
361 |
|
Gross profit % |
|
|
16.3 |
% |
|
|
9.2 |
% |
|
|
12.5 |
% |
|
|
14.5 |
% |
|
|
10.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Selling, general, and administrative |
|
|
219 |
|
|
|
237 |
|
|
|
244 |
|
|
|
463 |
|
|
|
520 |
|
Goodwill and indefinite-lived intangible asset impairment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,378 |
|
Long-lived asset impairment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
513 |
|
Operating profit (loss) |
|
|
12 |
|
|
|
(100 |
) |
|
|
(88 |
) |
|
|
(76 |
) |
|
|
(2,050 |
) |
Interest and financial costs |
|
|
(19 |
) |
|
|
(22 |
) |
|
|
(20 |
) |
|
|
(39 |
) |
|
|
(44 |
) |
Interest income |
|
|
2 |
|
|
|
2 |
|
|
|
2 |
|
|
|
4 |
|
|
|
5 |
|
Equity loss in unconsolidated affiliates |
|
|
— |
|
|
|
(6 |
) |
|
|
(4 |
) |
|
|
(4 |
) |
|
|
(239 |
) |
Other income (expense), net |
|
|
(16 |
) |
|
|
(8 |
) |
|
|
(10 |
) |
|
|
(26 |
) |
|
|
(11 |
) |
Loss before income taxes |
|
|
(21 |
) |
|
|
(134 |
) |
|
|
(120 |
) |
|
|
(141 |
) |
|
|
(2,339 |
) |
Provision (benefit) for income taxes |
|
|
2 |
|
|
|
(47 |
) |
|
|
(6 |
) |
|
|
(4 |
) |
|
|
(203 |
) |
Net loss |
|
|
(23 |
) |
|
|
(87 |
) |
|
|
(114 |
) |
|
|
(137 |
) |
|
|
(2,136 |
) |
Net loss attributable to noncontrolling interests |
|
|
3 |
|
|
|
6 |
|
|
|
1 |
|
|
|
4 |
|
|
|
4 |
|
Net loss attributable to Company |
|
$ |
(26 |
) |
|
$ |
(93 |
) |
|
$ |
(115 |
) |
|
$ |
(141 |
) |
|
$ |
(2,140 |
) |
Per share data: |
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic |
|
$ |
(0.07 |
) |
|
$ |
(0.24 |
) |
|
$ |
(0.30 |
) |
|
$ |
(0.37 |
) |
|
$ |
(5.57 |
) |
Diluted |
|
$ |
(0.07 |
) |
|
$ |
(0.24 |
) |
|
$ |
(0.30 |
) |
|
$ |
(0.37 |
) |
|
$ |
(5.57 |
) |
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic |
|
|
386 |
|
|
|
385 |
|
|
|
385 |
|
|
|
386 |
|
|
|
384 |
|
Diluted |
|
|
386 |
|
|
|
385 |
|
|
|
385 |
|
|
|
386 |
|
|
|
384 |
|
NOV INC. CONSOLIDATED BALANCE SHEETS (Unaudited) (In millions) |
||||||
|
|
June 30, |
|
December 31, |
||
|
|
2021 |
|
2020 |
||
ASSETS |
|
(Unaudited) |
|
|
||
Current assets: |
|
|
|
|
||
Cash and cash equivalents |
|
$ |
1,572 |
|
$ |
1,692 |
Receivables, net |
|
|
1,258 |
|
|
1,274 |
Inventories, net |
|
|
1,322 |
|
|
1,408 |
Contract assets |
|
|
534 |
|
|
611 |
Other current assets |
|
|
222 |
|
|
224 |
Total current assets |
|
|
4,908 |
|
|
5,209 |
|
|
|
|
|
||
Property, plant and equipment, net |
|
|
1,871 |
|
|
1,927 |
Lease right-of-use assets |
|
|
552 |
|
|
566 |
Goodwill and intangibles, net |
|
|
2,003 |
|
|
2,020 |
Other assets |
|
|
267 |
|
|
207 |
Total assets |
|
$ |
9,601 |
|
$ |
9,929 |
|
|
|
|
|
||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
||
Current liabilities: |
|
|
|
|
||
Accounts payable |
|
$ |
526 |
|
$ |
489 |
Accrued liabilities |
|
|
771 |
|
|
863 |
Contract liabilities |
|
|
392 |
|
|
354 |
Current portion of lease liabilities |
|
|
105 |
|
|
110 |
Accrued income taxes |
|
|
16 |
|
|
51 |
Total current liabilities |
|
|
1,810 |
|
|
1,867 |
|
|
|
|
|
||
Lease liabilities |
|
|
595 |
|
|
612 |
Long-term debt |
|
|
1,686 |
|
|
1,834 |
Other liabilities |
|
|
332 |
|
|
337 |
Total liabilities |
|
|
4,423 |
|
|
4,650 |
|
|
|
|
|
||
Total stockholders’ equity |
|
|
5,178 |
|
|
5,279 |
Total liabilities and stockholders’ equity |
|
$ |
9,601 |
|
$ |
9,929 |
NOV INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In millions) |
||||||||
|
|
Six Months Ended |
||||||
|
|
June 30, |
||||||
|
|
2021 |
|
2020 |
||||
Cash flows from operating activities: |
|
|
||||||
Net loss |
|
$ |
(137 |
) |
|
$ |
(2,136 |
) |
Adjustments to reconcile net loss to net cash provided by operating activities: |
|
|
|
|
||||
Depreciation and amortization |
|
|
156 |
|
|
|
187 |
|
Goodwill and indefinite-lived intangible asset impairment |
|
|
— |
|
|
|
1,378 |
|
Long-lived asset impairment |
|
|
— |
|
|
|
513 |
|
Working capital and other operating items, net |
|
|
131 |
|
|
|
475 |
|
Net cash provided by operating activities |
|
|
150 |
|
|
|
417 |
|
|
|
|
|
|
||||
Cash flows from investing activities: |
|
|
|
|
||||
Purchases of property, plant and equipment |
|
|
(98 |
) |
|
|
(124 |
) |
Other |
|
|
9 |
|
|
|
13 |
|
Net cash used in investing activities |
|
|
(89 |
) |
|
|
(111 |
) |
|
|
|
|
|
||||
Cash flows from financing activities: |
|
|
|
|
||||
Borrowings against lines of credit and other debt |
|
|
34 |
|
|
|
25 |
|
Payments against lines of credit and other debt |
|
|
(183 |
) |
|
|
— |
|
Cash dividends paid |
|
|
— |
|
|
|
(19 |
) |
Other |
|
|
(33 |
) |
|
|
(33 |
) |
Net cash used in financing activities |
|
|
(182 |
) |
|
|
(27 |
) |
Effect of exchange rates on cash |
|
|
1 |
|
|
|
(3 |
) |
Increase (decrease) in cash and cash equivalents |
|
|
(120 |
) |
|
|
276 |
|
Cash and cash equivalents, beginning of period |
|
|
1,692 |
|
|
|
1,171 |
|
Cash and cash equivalents, end of period |
|
$ |
1,572 |
|
|
$ |
1,447 |
|
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 and restructure charges (severance, facility closure, and inventory write downs) net of related credits. |
||||||||||||||||||||
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||||||||
|
|
June 30, |
|
March 31, |
|
June 30, |
||||||||||||||
|
|
2021 |
|
2020 |
|
2021 |
|
2021 |
|
2020 |
||||||||||
Operating profit (loss): |
|
|
|
|
|
|
|
|
|
|
||||||||||
Wellbore Technologies |
|
$ |
6 |
|
|
$ |
(67 |
) |
|
$ |
(14 |
) |
|
$ |
(8 |
) |
|
$ |
(730 |
) |
Completion & Production Solutions |
|
|
(6 |
) |
|
|
42 |
|
|
|
(17 |
) |
|
|
(23 |
) |
|
|
(971 |
) |
Rig Technologies |
|
|
49 |
|
|
|
(25 |
) |
|
|
(8 |
) |
|
|
41 |
|
|
|
(227 |
) |
Eliminations and corporate costs |
|
|
(37 |
) |
|
|
(50 |
) |
|
|
(49 |
) |
|
|
(86 |
) |
|
|
(122 |
) |
Total operating loss |
|
$ |
12 |
|
|
$ |
(100 |
) |
|
$ |
(88 |
) |
|
$ |
(76 |
) |
|
$ |
(2,050 |
) |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Other items: |
|
|
|
|
|
|
|
|
|
|
||||||||||
Wellbore Technologies |
|
$ |
18 |
|
|
$ |
62 |
|
|
$ |
6 |
|
|
$ |
24 |
|
|
$ |
777 |
|
Completion & Production Solutions |
|
|
(6 |
) |
|
|
12 |
|
|
|
(2 |
) |
|
|
(8 |
) |
|
|
1,066 |
|
Rig Technologies |
|
|
8 |
|
|
|
20 |
|
|
|
3 |
|
|
|
11 |
|
|
|
258 |
|
Corporate |
|
|
(5 |
) |
|
|
8 |
|
|
|
2 |
|
|
|
(3 |
) |
|
|
24 |
|
Total other items |
|
$ |
15 |
|
|
$ |
102 |
|
|
$ |
9 |
|
|
$ |
24 |
|
|
$ |
2,125 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Depreciation & amortization: |
|
|
|
|
|
|
|
|
|
|
||||||||||
Wellbore Technologies |
|
$ |
39 |
|
|
$ |
47 |
|
|
$ |
42 |
|
|
$ |
81 |
|
|
$ |
98 |
|
Completion & Production Solutions |
|
|
16 |
|
|
|
14 |
|
|
|
15 |
|
|
|
31 |
|
|
|
44 |
|
Rig Technologies |
|
|
18 |
|
|
|
19 |
|
|
|
18 |
|
|
|
36 |
|
|
|
39 |
|
Corporate |
|
|
4 |
|
|
|
2 |
|
|
|
4 |
|
|
|
8 |
|
|
|
6 |
|
Total depreciation & amortization |
|
$ |
77 |
|
|
$ |
82 |
|
|
$ |
79 |
|
|
$ |
156 |
|
|
$ |
187 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted EBITDA: |
|
|
|
|
|
|
|
|
|
|
||||||||||
Wellbore Technologies |
|
$ |
63 |
|
|
$ |
42 |
|
|
$ |
34 |
|
|
$ |
97 |
|
|
$ |
145 |
|
Completion & Production Solutions |
|
|
4 |
|
|
|
68 |
|
|
|
(4 |
) |
|
|
— |
|
|
|
139 |
|
Rig Technologies |
|
|
75 |
|
|
|
14 |
|
|
|
13 |
|
|
|
88 |
|
|
|
70 |
|
Eliminations and corporate costs |
|
|
(38 |
) |
|
|
(40 |
) |
|
|
(43 |
) |
|
|
(81 |
) |
|
|
(92 |
) |
Total Adjusted EBITDA |
|
$ |
104 |
|
|
$ |
84 |
|
|
$ |
— |
|
|
$ |
104 |
|
|
$ |
262 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Reconciliation of Adjusted EBITDA: |
|
|
|
|
|
|
|
|
|
|
||||||||||
GAAP net loss attributable to Company |
|
$ |
(26 |
) |
|
$ |
(93 |
) |
|
$ |
(115 |
) |
|
$ |
(141 |
) |
|
$ |
(2,140 |
) |
Noncontrolling interests |
|
|
3 |
|
|
|
6 |
|
|
|
1 |
|
|
|
4 |
|
|
|
4 |
|
Benefit for income taxes |
|
|
2 |
|
|
|
(47 |
) |
|
|
(6 |
) |
|
|
(4 |
) |
|
|
(203 |
) |
Interest expense |
|
|
19 |
|
|
|
22 |
|
|
|
20 |
|
|
|
39 |
|
|
|
44 |
|
Interest income |
|
|
(2 |
) |
|
|
(2 |
) |
|
|
(2 |
) |
|
|
(4 |
) |
|
|
(5 |
) |
Equity loss in unconsolidated affiliate |
|
|
— |
|
|
|
6 |
|
|
|
4 |
|
|
|
4 |
|
|
|
239 |
|
Other (income) expense, net |
|
|
16 |
|
|
|
8 |
|
|
|
10 |
|
|
|
26 |
|
|
|
11 |
|
Depreciation and amortization |
|
|
77 |
|
|
|
82 |
|
|
|
79 |
|
|
|
156 |
|
|
|
187 |
|
Other items |
|
|
15 |
|
|
|
102 |
|
|
|
9 |
|
|
|
24 |
|
|
|
2,125 |
|
Total Adjusted EBITDA |
|
$ |
104 |
|
|
$ |
84 |
|
|
$ |
— |
|
|
$ |
104 |
|
|
$ |
262 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20210727006178/en/
FAQ
What were NOV's revenues for Q2 2021?
How did NOV's net loss in Q2 2021 compare to previous quarters?
What is the adjusted EBITDA for NOV in the second quarter of 2021?
What challenges is NOV facing in Q2 2021?
What is NOV's outlook for future growth?
