National Oilwell Varco Reports Third Quarter 2018 Earnings
“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
We believe the industry is poised to achieve higher levels of activity
in 2019 as it works through near-term logistical challenges in North
American unconventional basins, navigates end-of-year budget
constraints, and sanctions more offshore projects. 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. We
also see pockets of demand strengthening in certain international land
markets, as operators respond to generally higher commodity prices. In
the meantime, we continue to develop and deliver technology that helps
lower the industry’s marginal production costs, and position our
business as a leading innovator and provider of critical well
construction tools.
Wellbore Technologies
Wellbore Technologies generated revenues of
Completion & Production Solutions
Completion & Production Solutions generated revenues of
New orders booked during the quarter were
Rig Technologies
Rig Technologies generated revenues of
New orders booked during the quarter totaled
Other Corporate Items
Revenue eliminations decreased
Cash flow provided by operations for the third quarter of 2018 was
Significant Events and Achievements
NOV completed the first commercial field trial of the Vector™
SelectShift™ downhole adjustable motor in
NOV’s highly engineered drill bits with 3D shaped cutter technology
helped a prominent operator in the
NOV recently completed several successful installations of its
packer-setting system, which features the latest product from its
d-Solve™ dissolvable platform, the i-Seat ball, with a major
NOV achieved several wins in its directional measurement and steerable
technologies business. In
NOV, in consortium with
NOV’s drill bits helped a major operator in
NOV customers continue to see the benefits of using Agitator™ systems in
conjunction with an RSS in global operations, including in technically
challenging laterals greater than 10,000 ft. On a project in the
NOV’s eVolve™ optimization and automation services continues to deliver value for customers in North American land drilling projects, recently completing the ninth successful well for a major independent operator in the Permian running drilling automation services. The project has so far reduced total bit runs and overall failures per well. Encouraged by the cost and time savings delivered by these performance improvements, the operator has extended the eVolve contract to an additional rig.
NOV’s MPowerD™ managed pressure drilling (MPD) group delivered an integrated MPowerD MPD control system on a Cyberbase drilling control system for a deepwater drillship. NOV and the drilling contractor worked together very closely to introduce the system and fully embed MPD into the drilling controls network, making this the first completely integrated MPD control system installed on an offshore drilling rig. Integration of MPD controls into the Cyberbase system will enable a step-change in MPD efficiency and safety of operations for the drilling contractor, and the company can now offer MPD as an integrated service to their clients. The drilling contractor recently placed an order for a second system, further reinforcing their commitment to a long-term MPD strategy. In addition, NOV booked 10 land MPD projects for a large independent operator in the Mid Continent.
Third Quarter Earnings Conference Call
NOV will hold a conference call to discuss its third quarter 2018
results on
About NOV
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
Certain prior period amounts have been reclassified in this press release to be consistent with current period presentation.
NATIONAL OILWELL VARCO, INC. | ||||||||||||||||||||
CONSOLIDATED STATEMENTS OF INCOME (LOSS) (Unaudited) | ||||||||||||||||||||
(In millions, except per share data) | ||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||
September 30, | June 30, | September 30, | ||||||||||||||||||
2018 | 2017 | 2018 | 2018 | 2017 | ||||||||||||||||
Revenue: | ||||||||||||||||||||
Wellbore Technologies | $ | 847 | $ | 693 | $ | 793 | $ | 2,351 | $ | 1,862 | ||||||||||
Completion & Production Solutions | 735 | 682 | 738 | 2,143 | 1,982 | |||||||||||||||
Rig Technologies | 637 | 510 | 651 | 1,771 | 1,638 | |||||||||||||||
Eliminations | (65 | ) | (50 | ) | (76 | ) | (210 | ) | (147 | ) | ||||||||||
Total revenue | 2,154 | 1,835 | 2,106 | 6,055 | 5,335 | |||||||||||||||
Gross profit | 393 | 285 | 355 | 1,035 | 725 | |||||||||||||||
Gross profit % | 18.2 | % | 15.5 | % | 16.9 | % | 17.1 | % | 13.6 | % | ||||||||||
Selling, general, and administrative | 320 | 292 | 303 | 911 | 891 | |||||||||||||||
Operating profit (loss) | 73 | (7 | ) | 52 | 124 | (166 | ) | |||||||||||||
Interest and financial costs | (24 | ) | (26 | ) | (23 | ) | (71 | ) | (77 | ) | ||||||||||
Interest income | 6 | 11 | 5 | 18 | 19 | |||||||||||||||
Equity income (loss) in unconsolidated affiliates | (2 | ) | (2 | ) | (1 | ) | (1 | ) | (4 | ) | ||||||||||
Other income (expense), net | (20 | ) | (16 | ) | (3 | ) | (70 | ) | (36 | ) | ||||||||||
Income (loss) before income taxes | 33 | (40 | ) | 30 | — | (264 | ) | |||||||||||||
Provision (benefit) for income taxes | 29 | (13 | ) | 5 | 37 | (43 | ) | |||||||||||||
Net income (loss) | 4 | (27 | ) | 25 | (37 | ) | (221 | ) | ||||||||||||
Net (income) loss attributable to noncontrolling interests | 3 | (1 | ) | 1 | 6 | 2 | ||||||||||||||
Net income (loss) attributable to Company | $ | 1 | $ | (26 | ) | $ | 24 | $ | (43 | ) | $ | (223 | ) | |||||||
Per share data: | ||||||||||||||||||||
Basic | $ | 0.00 | $ | (0.07 | ) | $ | 0.06 | $ | (0.11 | ) | $ | (0.59 | ) | |||||||
Diluted | $ | 0.00 | $ | (0.07 | ) | $ | 0.06 | $ | (0.11 | ) | $ | (0.59 | ) | |||||||
Weighted average shares outstanding: | ||||||||||||||||||||
Basic | 379 | 377 | 378 | 378 | 377 | |||||||||||||||
Diluted | 383 | 377 | 381 | 378 | 377 | |||||||||||||||
NATIONAL OILWELL VARCO, INC. | |||||||
CONSOLIDATED BALANCE SHEETS (Unaudited) | |||||||
(In millions) | |||||||
September 30, | December 31, | ||||||
2018 | 2017 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 1,293 | $ | 1,437 | |||
Receivables, net | 2,005 | 2,015 | |||||
Inventories, net | 3,177 | 3,003 | |||||
Contract assets | 483 | 495 | |||||
Other current assets | 263 | 267 | |||||
Total current assets | 7,221 | 7,217 | |||||
Property, plant and equipment, net | 2,813 | 3,002 | |||||
Goodwill and intangibles, net | 9,411 | 9,528 | |||||
Other assets | 448 | 459 | |||||
Total assets | $ | 19,893 | $ | 20,206 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 675 | $ | 510 | |||
Accrued liabilities | 1,023 | 1,238 | |||||
Contract liabilities | 570 | 519 | |||||
Current portion of long-term debt and short-term borrowings | 8 | 6 | |||||
Accrued income taxes | — | 81 | |||||
Total current liabilities | 2,276 | 2,354 | |||||
Long-term debt | 2,706 | 2,706 | |||||
Other liabilities | 935 | 986 | |||||
Total liabilities | 5,917 | 6,046 | |||||
Total stockholders’ equity | 13,976 | 14,160 | |||||
Total liabilities and stockholders’ equity | $ | 19,893 | $ | 20,206 | |||
NATIONAL OILWELL VARCO, 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 in the three and
nine months ended
Three Months Ended | Nine Months Ended | |||||||||||||||||||
September 30, | June 30 | September 30, | ||||||||||||||||||
2018 | 2017 | 2018 | 2018 | 2017 | ||||||||||||||||
Operating profit (loss): | ||||||||||||||||||||
Wellbore Technologies | $ | 40 | $ | — | $ | 38 | $ | 90 | $ | (81 | ) | |||||||||
Completion & Production Solutions | 46 | 44 | 40 | 102 | 79 | |||||||||||||||
Rig Technologies | 58 | 18 | 62 | 138 | 37 | |||||||||||||||
Eliminations and corporate costs | (71 | ) | (69 | ) | (88 | ) | (206 | ) | (201 | ) | ||||||||||
Total operating profit (loss) | $ | 73 | $ | (7 | ) | $ | 52 | $ | 124 | $ | (166 | ) | ||||||||
Other items: | ||||||||||||||||||||
Wellbore Technologies | $ | — | $ | — | $ | — | $ | (3 | ) | $ | (4 | ) | ||||||||
Completion & Production Solutions | — | — | — | 3 | 32 | |||||||||||||||
Rig Technologies | — | — | — | 6 | 29 | |||||||||||||||
Corporate | — | — | — | (18 | ) | — | ||||||||||||||
Total other items | $ | — | $ | — | $ | — | $ | (12 | ) | $ | 57 | |||||||||
Depreciation & amortization: | ||||||||||||||||||||
Wellbore Technologies | $ | 95 | $ | 94 | $ | 95 | $ | 284 | $ | 283 | ||||||||||
Completion & Production Solutions | 53 | 53 | 54 | 161 | 161 | |||||||||||||||
Rig Technologies | 20 | 22 | 22 | 63 | 67 | |||||||||||||||
Corporate | 4 | 5 | 3 | 11 | 12 | |||||||||||||||
Total depreciation & amortization | $ | 172 | $ | 174 | $ | 174 | $ | 519 | $ | 523 | ||||||||||
Adjusted EBITDA: | ||||||||||||||||||||
Wellbore Technologies | $ | 135 | $ | 94 | $ | 133 | $ | 371 | $ | 198 | ||||||||||
Completion & Production Solutions | 99 | 97 | 94 | 266 | 272 | |||||||||||||||
Rig Technologies | 78 | 40 | 84 | 207 | 133 | |||||||||||||||
Eliminations and corporate costs | (67 | ) | (64 | ) | (85 | ) | (213 | ) | (189 | ) | ||||||||||
Total adjusted EBITDA | $ | 245 | $ | 167 | $ | 226 | $ | 631 | $ | 414 | ||||||||||
Reconciliation of Adjusted EBITDA: | ||||||||||||||||||||
GAAP net income (loss) attributable to Company | $ | 1 | $ | (26 | ) | $ | 24 | $ | (43 | ) | $ | (223 | ) | |||||||
Noncontrolling interests | 3 | (1 | ) | 1 | 6 | 2 | ||||||||||||||
Provision (benefit) for income taxes | 29 | (13 | ) | 5 | 37 | (43 | ) | |||||||||||||
Interest expense | 24 | 26 | 23 | 71 | 77 | |||||||||||||||
Interest income | (6 | ) | (11 | ) | (5 | ) | (18 | ) | (19 | ) | ||||||||||
Equity (income) loss in unconsolidated affiliate | 2 | 2 | 1 | 1 | 4 | |||||||||||||||
Other (income) expense, net | 20 | 16 | 3 | 70 | 36 | |||||||||||||||
Depreciation and amortization | 172 | 174 | 174 | 519 | 523 | |||||||||||||||
Other items | — | — | — | (12 | ) | 57 | ||||||||||||||
Total Adjusted EBITDA | $ | 245 | $ | 167 | $ | 226 | $ | 631 | $ | 414 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20181025006101/en/
Source:
National Oilwell Varco, Inc.
Loren Singletary, 713-346-7807
Loren.Singletary@nov.com