National Oilwell Varco Reports First Quarter 2018 Results
“During the first quarter of 2018 NOV benefitted from growing demand for
short-cycle consumables and services in
“We expect to be back on track soon, though, as most of the capital equipment deliveries that were deferred by customers at the end of the quarter were accepted early in the second quarter, giving us confidence that the general upward trajectory of business will resume in the second quarter. Scarcity is returning to many corners of the oilfield, and we’ve seen good uptake on technologies we’ve been introducing through the downturn, all while the oil supply and demand picture continues to tighten.”
Wellbore Technologies
Wellbore Technologies generated revenues of
Completion & Production Solutions
Completion & Production Solutions generated revenues of
Backlog for capital equipment orders for Completion & Production
Solutions at
Rig Technologies
Rig Technologies generated revenues of
Backlog for capital equipment orders for Rig Technologies at
Significant Events and Achievements
NOV won two
NOV received multiple large orders for the Tolteq™ iSeries™
measurement-while-drilling (MWD) products in the first quarter,
including two large multi-tool orders in the US and one multi-tool order
in
NOV introduced and began delivery of its next-generation shale shaker, the Brandt™ SABRE™. The first of its kind, SABRE is a modular shaker system based upon a scalable platform. Through a simple field upgrade, the need to change out the complete shaker system is eliminated, allowing customers to easily adapt to specific requirements. Field trials have proven an increase in flow handling capacity of 50 to 100 percent compared to existing high-performance shakers, which allows SABRE to better control low-gravity solids throughout the entire drilling process—reducing dilution and associated logistics costs. The SABRE shaker is also proven to deliver dryer cuttings, reducing both haul-off and disposal costs. Trials indicate that screen costs per foot are reduced with this new technology, with the SABRE shaker’s patented screens being super lightweight (weighing in at only 14 lb) and repairable using NOV’s unique AX SNAPFAST™ screen repair system.
NOV signed an agreement with Maersk to extend the existing
condition-based monitoring (CBM) Partnership agreement from seven to a
total of 18 rigs. The new contract expands the list of equipment
incorporated in the
NOV introduced patent-pending TORC™ technology, which is already
delivering strong results in Canada’s
Momentum in NOV’s eVolve™ optimization and automation service business
continues to build in markets around the globe. NOV executed automation
service contracts with major operators for projects in the
NOV acquired
NOV continues to expand its scope of work on the Statoil Johan Castberg
and Statoil Johan Sverdrup II developments following successful
execution of several packages delivered to the first-phase development
of Johan Sverdrup in 2017. NOV will supply separation, produced water,
sand handling, and gas-dehydration packages for
Other Corporate Items
Cash flow used by operations for the first quarter of 2018 was
First Quarter Earnings Conference Call
NOV will hold a conference call to discuss its first 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) |
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Three Months Ended | |||||||||||||||
March 31, | December 31, | ||||||||||||||
2018 | 2017 | 2017 | |||||||||||||
Revenue: | |||||||||||||||
Wellbore Technologies | $ | 711 | $ | 555 | $ | 715 | |||||||||
Completion & Production Solutions | 670 | 648 | 690 | ||||||||||||
Rig Technologies | 483 | 582 | 614 | ||||||||||||
Eliminations | (69 | ) | (44 | ) | (50 | ) | |||||||||
Total revenue | 1,795 | 1,741 | 1,969 | ||||||||||||
Gross profit | 287 | 209 | 167 | ||||||||||||
Gross profit % | 16.0 | % | 12.0 | % | 8.5 | % | |||||||||
Selling, general, and administrative | 288 | 306 | 278 | ||||||||||||
Operating loss | (1 | ) | (97 | ) | (111 | ) | |||||||||
Interest and financial costs | (24 | ) | (25 | ) | (25 | ) | |||||||||
Interest income | 7 | 4 | 6 | ||||||||||||
Equity income (loss) in unconsolidated affiliates | 2 | - | (1 | ) | |||||||||||
Other income (expense), net | (47 | ) | (15 | ) | (7 | ) | |||||||||
Loss before income taxes | (63 | ) | (133 | ) | (138 | ) | |||||||||
Provision for income taxes | 3 | (13 | ) | (123 | ) | ||||||||||
Net loss | (66 | ) | (120 | ) | (15 | ) | |||||||||
Net income (loss) attributable to noncontrolling interests | 2 | 2 | (1 | ) | |||||||||||
Net loss attributable to Company | $ | (68 | ) | $ | (122 | ) | $ | (14 | ) | ||||||
Per share data: | |||||||||||||||
Basic | $ | (0.18 | ) | $ | (0.32 | ) | $ | (0.04 | ) | ||||||
Diluted | $ | (0.18 | ) | $ | (0.32 | ) | $ | (0.04 | ) | ||||||
Weighted average shares outstanding: | |||||||||||||||
Basic | 377 | 376 | 377 | ||||||||||||
Diluted | 377 | 376 | 377 |
NATIONAL OILWELL VARCO, INC. CONSOLIDATED BALANCE SHEETS (Unaudited) (In millions) |
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March 31, | December 31, | ||||||
2018 | 2017 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 1,236 | $ | 1,437 | |||
Receivables, net | 2,102 | 2,015 | |||||
Inventories, net | 3,146 | 3,003 | |||||
Contract assets | 415 | 495 | |||||
Other current assets | 287 | 267 | |||||
Total current assets | 7,186 | 7,217 | |||||
Property, plant and equipment, net | 2,926 | 3,002 | |||||
Goodwill and intangibles, net | 9,432 | 9,528 | |||||
Other assets | 466 | 459 | |||||
Total assets | $ | 20,010 | $ | 20,206 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 528 | $ | 510 | |||
Accrued liabilities | 965 | 1,238 | |||||
Contract liabilities | 598 | 519 | |||||
Current portion of long-term debt | |||||||
and short-term borrowings | 6 | 6 | |||||
Accrued income taxes | 35 | 81 | |||||
Total current liabilities | 2,132 | 2,354 | |||||
Long-term debt | 2,707 | 2,706 | |||||
Other liabilities | 1,020 | 986 | |||||
Total liabilities | 5,859 | 6,046 | |||||
Total stockholders’ equity | 14,151 | 14,160 | |||||
Total liabilities and stockholders’ equity | $ | 20,010 | $ | 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 |
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 months ended March 31, 2018 were a net credit of $12 million, |
pre-tax, primarily from the reversal of certain accruals, partially offset by restructure charges and |
severance payments. Other items in 2017 consisted primarily of restructure charges for inventory write- |
downs, facility closures and severance payments. |
Three Months Ended | |||||||||||||||
March 31, | December 31, | ||||||||||||||
2018 | 2017 | 2017 | |||||||||||||
Operating profit (loss): | |||||||||||||||
Wellbore Technologies | $ | 12 | $ | (57 | ) | $ | (21 | ) | |||||||
Completion & Production Solutions | 16 | 8 | 19 | ||||||||||||
Rig Technologies | 18 | 13 | (51 | ) | |||||||||||
Eliminations and corporate costs | (47 | ) | (61 | ) | (58 | ) | |||||||||
Total operating profit (loss) | $ | (1 | ) | $ | (97 | ) | $ | (111 | ) | ||||||
Other items: | |||||||||||||||
Wellbore Technologies | $ | (3 | ) | $ | - | $ | 32 | ||||||||
Completion & Production Solutions | 3 | 15 | 1 | ||||||||||||
Rig Technologies | 6 | 12 | 100 | ||||||||||||
Corporate | (18 | ) | - | - | |||||||||||
Total other items | $ | (12 | ) | $ | 27 | $ | 133 | ||||||||
Depreciation & amortization: | |||||||||||||||
Wellbore Technologies | $ | 94 | $ | 95 | $ | 96 | |||||||||
Completion & Production Solutions | 54 | 54 | 54 | ||||||||||||
Rig Technologies | 21 | 22 | 21 | ||||||||||||
Corporate | 4 | 4 | 4 | ||||||||||||
Total depreciation & amortization | $ | 173 | $ | 175 | $ | 175 | |||||||||
Adjusted EBITDA: | |||||||||||||||
Wellbore Technologies | $ | 103 | $ | 38 | $ | 107 | |||||||||
Completion & Production Solutions | 73 | 77 | 74 | ||||||||||||
Rig Technologies | 45 | 47 | 70 | ||||||||||||
Eliminations and corporate costs | (61 | ) | (57 | ) | (54 | ) | |||||||||
Total Adjusted EBITDA | $ | 160 | $ | 105 | $ | 197 | |||||||||
Reconciliation of Adjusted EBITDA: | |||||||||||||||
GAAP net loss attributable to Company | $ | (68 | ) | $ | (122 | ) | $ | (14 | ) | ||||||
Net income (loss) attributable to noncontrolling interest | 2 | 2 | (1 | ) | |||||||||||
Provision for income taxes | 3 | (13 | ) | (123 | ) | ||||||||||
Interest expense | 24 | 25 | 25 | ||||||||||||
Interest income | (7 | ) | (4 | ) | (6 | ) | |||||||||
Equity (income) loss in unconsolidated affiliates | (2 | ) | - | 1 | |||||||||||
Other (income) expense, net | 47 | 15 | 7 | ||||||||||||
Depreciation & amortization | 173 | 175 | 175 | ||||||||||||
Other items in operating profit (loss) | (12 | ) | 27 | 133 | |||||||||||
Total Adjusted EBITDA | $ | 160 | $ | 105 | $ | 197 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20180426007034/en/
Source:
National Oilwell Varco, Inc.
Loren Singletary, (713) 346-7807
Loren.Singletary@nov.com