National Oilwell Varco Q2 earnings

NOV announces second quarter 2015 earnings

National Oilwell Varco, Inc. (NYSE: NOV) today reported that for its second quarter ended June 30, 2015, it earned net income of US$289 million, or US$0.74 per fully diluted share, compared to first quarter ended March 31, 2015 net income of US$310 million, or US$0.76 per fully diluted share. Excluding other items and non-recurring charges from all periods, second quarter net income was US$301 million, or US$0.77 per fully diluted share, compared to US$1.14 in the first quarter of 2015 and US$1.47 in the second quarter of 2014. Second quarter 2015 other items were US$17 million in pre-tax severance and facility closure charges.

Revenues for the second quarter of 2015 were US$3.91 billion, a decrease of 19 % from the first quarter of 2015 and a decrease of 26 % from the second quarter of 2014. Operating profit for the quarter, excluding the other items, was US$455 million, or 11.6 % of sales. EBITDA, excluding other items, was US$627 million, or 16.0 percent of sales, down 45 % from the prior year

During the second quarter of 2015, the company repurchased and retired 8.6 million shares of its common stock at an average price of US$51.73 per share for a total purchase price of US$447 million. Since initiating a share buyback program in September 2014, the Company repurchased 44.7 million shares through the end of the second quarter, or 10.4 % of its shares outstanding, at an average price of US$57.12 per share.

Ending backlog for the second quarter of 2015 was US$9.03 billion for the company’s Rig Systems segment and US$1.19 billion for the company’s Completion & Production Solutions segment.

Clay C. Williams, Chairman, President and CEO of National Oilwell Varco, stated, 'NOV achieved solid results this quarter in the face of the cyclical downturn which has impacted our business. The operating margins delivered by our segments this quarter reflect our focus on reducing costs to become more efficient. We continue to advance our long-term strategies and expect that the strength of our balance sheet will allow us to identify investment opportunities arising from this downturn. We are positioning the company to perform well through the downturn and to generate profitable growth in the inevitable upturn, and expect that while 2015 will continue to be challenging, it will afford us the opportunity to make great progress against our strategic plans.'

Rig Systems

The Rig Systems segment generated revenues of US$1.93 billion in the second quarter of 2015, a decrease of 24 % from the first quarter of 2015 and a decrease of 19 % from the second quarter of 2014. Operating profit for this segment was US$395 million, or 20.5 percent of sales. EBITDA for this segment was US$419 million, or 21.7 percent of sales. Revenue out of backlog for the segment was US$1.70 billion.

Backlog for capital equipment orders for the Company’s Rig Systems segment at June 30, 2015 was US$9.03 billion, down 13 % from the first quarter of 2015, and down 41 % from the end of the second quarter of 2014. New orders during the quarter were US$313 million.

Rig Aftermarket

The Rig Aftermarket segment generated revenues of US$657 million in the second quarter of 2015, a decrease of nine percent from the first quarter of 2015 and a decrease of 16 percent from the second quarter of 2014. Operating profit for this segment was US$145 million, or 22.1 % of sales. EBITDA for this segment was US$152 million, or 23.1 % of sales.

Wellbore Technologies

The Wellbore Technologies segment generated revenues of US$956 million in the second quarter of 2015, a decrease of 18 % from the first quarter of 2015 and a decrease of 34 % from the second quarter of 2014. Operating profit for this segment was US$47 million, or 4.9 % of sales. EBITDA for this segment was US$146 million, or 15.3 % of sales.

Completion & Production Solutions

The Completion & Production Solutions segment generated revenues of US$873 million in the second quarter of 2015, a decrease of eight percent from the first quarter of 2015 and a decrease of 23 % from the second quarter of 2014. Revenues out of backlog were US$538 million. Operating profit for this segment was US$81 million, or 9.3 % of sales. EBITDA for this segment was US$141 million, or 16.2 % of sales.

Backlog for capital equipment orders for the company’s Completion & Production Solutions segment at June 30, 2015 was US$1.19 billion, down 18 %from the first quarter of 2015, and down 44 % from the end of the second quarter of 2014. New orders during the quarter were US$264 million.

The company has scheduled a conference call for July 28, 2015, at 8:00 a.m. Central Time to discuss second quarter results. The call will be broadcast through the Investor Relations link on National Oilwell Varco’s web site at www.nov.com, and a replay will be available on the site for thirty days following the conference. Participants may also join the conference call by dialing 1-866-312-4825 within North America or 1-720-634-2948 outside of North America 5 to 10 minutes prior to the scheduled start time and asking for the 'National Oilwell Varco Earnings conference call.'

National Oilwell Varco is a worldwide leader in the design, manufacture and sale of equipment and components used in oil and gas drilling and production operations and the provision of oilfield services to the upstream oil and gas industry.

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 actual future events or results. Readers are referred to documents filed by National Oilwell Varco 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.

Adapted from a press release by Louise Mulhall

Published on 30/07/2015


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