NOV Q3 2020 Earnings Report
Key Takeaways
National Oilwell Varco reported a decrease in revenue compared to the previous quarter and the same quarter last year. However, the company's net loss improved sequentially due to solid execution on cost reduction and working capital initiatives. The company generated significant cash flow from operations and reduced net debt during the quarter. Despite challenging market conditions, the company is seeing encouraging signals in North America and international markets.
Third quarter revenues were $1.38 billion, a decrease of seven percent compared to the second quarter of 2020 and a decrease of 35 percent compared to the third quarter of 2019.
Net loss for the third quarter of 2020 improved $38 million sequentially to $55 million.
Adjusted EBITDA decreased $13 million sequentially to $71 million, or 5.1 percent of sales.
Generated $323 million in cash flow from operations and a reduction in net debt to $339 million during the third quarter of 2020.
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NOV Revenue by Segment
Forward Guidance
Company sees drilling activity has bottomed and is likely to rise modestly from current levels in North America, and is seeing more of its customers return to work and fewer COVID-19-related logistical disruptions in international markets. Order intake is likely to improve in the fourth quarter.
Positive Outlook
- Drilling activity in North America has bottomed and is likely to rise modestly from current levels.
- International markets are seeing more customers return to work.
- COVID-19-related logistical disruptions are decreasing.
- Rig Technologies segment has seen significant increases in tendering activity.
- Completion & Production Solutions segments have both seen significant increases in tendering activity.