Group 1 - NOV Inc. has entered into an agreement with Petrobras S.A. to develop CO2-resistant flexible pipes for deepwater oil and gas operations, addressing the challenge of stress corrosion cracking (SCC) caused by high CO2 concentration [1][2] - The collaboration will focus on developing stainless steel armoring technology to combat SCC, with Petrobras investing in this technology while working closely with NOV [2] - The partners aim to create 6-inch and 8-inch production and gas injection risers along with associated flowlines designed to withstand high CO2 levels in deepwater environments [3] Group 2 - The new technology is intended to retain the core features of standard flexible pipes, such as easy installation and compatibility with existing oil and gas infrastructure, minimizing disruptions to ongoing operations [4] - NOV emphasizes that this innovative solution showcases how collaboration and knowledge sharing can advance technological developments that benefit the oil and gas industry as a whole [5] Group 3 - Both NOV and Petrobras currently hold a Zacks Rank 3 (Hold), indicating a neutral outlook [6] - Other energy sector companies with better rankings include Archrock Inc. with a Zacks Rank 1 (Strong Buy) and Nine Energy Service with a Zacks Rank 2 (Buy) [6]

Core Viewpoint - NOV Inc. is a well-established provider of advanced equipment and technology for the oil, gas, and renewable energy industries, with a significant role in global energy production and a focus on both traditional and renewable energy sources [1] Group 1: Growth Opportunities - Strong backlog growth and a resilient book-to-bill ratio have been maintained, with a book-to-bill ratio above 1 in 10 of the last 12 quarters, indicating the ability to secure new orders faster than product deliveries [3] - The company's backlog has grown by 22% over the past four years, providing strong visibility into future revenues, particularly for offshore and production-related equipment [3] - NOV generated $953 million in free cash flow in 2024, converting 86% of its EBITDA into cash, allowing for investment in growth initiatives and shareholder returns [4][6] - The company is gaining market share in high-growth segments, with a notable 89% year-over-year growth in friction reduction tools and downhole tools [7] - NOV is benefiting from rising offshore investments, particularly in deepwater projects, securing major FPSO equipment contracts in Brazil and West Africa [8] - Advancements in digital and automation solutions, such as the Max Edge platform, have seen strong adoption, positioning NOV for growth in high-tech energy services [9] Group 2: Risks and Challenges - Potential headwinds from commodity price volatility could pressure oil prices, leading to cuts in exploration and production spending, negatively impacting NOV's revenue outlook [10] - The offshore drilling market faces uncertainty, with many drilling contractors experiencing idle rigs, leading to lower aftermarket demand for NOV's offshore drilling equipment and services [11] - Weak demand for pressure pumping and stimulation equipment in North America is expected to weigh on NOV's revenues and margins in 2025 [12] - NOV's share price has underperformed compared to the Zacks Oil and Energy sector and the Mechanical and Equipment Oil and Gas sub-industry, dropping 12.6% over the past six months [13] - North America's drilling activity declined by 9% in 2024, impacting demand for NOV's short-cycle products [16] Group 3: Final Thoughts - NOV's strong backlog growth and free cash flow generation support long-term stability and investor confidence, despite facing potential challenges from commodity price volatility and market uncertainties [17][18]

Financial Performance - As of December 31, 2024, the company's backlog was $4.4 billion, up from $4.1 billion in 2023 and $3.8 billion in 2022, indicating a growth of approximately 7.3% year-over-year[60] - The company reported foreign currency losses of $19 million, $84 million, and $25 million for the years ended December 31, 2024, 2023, and 2022, respectively, highlighting a significant decrease in losses in 2024[206] - The company had transactional exposures totaling $594 million and translational exposures totaling $354 million in foreign currencies as of December 31, 2024[208] - The company’s borrowings included $1,091 million in 3.95% Senior Notes and $496 million in 3.60% Senior Notes, with no outstanding letters of credit under the credit facility, resulting in $1.5 billion of available funds[210] Innovation and Technology - The company has invested in new technologies related to renewable energy, indicating a strategic focus on diversifying its product offerings[54] - The company holds a substantial number of granted patents and pending patent applications worldwide, with expiration dates ranging from 2025 to 2044, reflecting its commitment to innovation[55] Operational Challenges - The company has experienced rising prices for stainless alloy products, which may impact future operations if raw material costs continue to increase[58] Workforce and Diversity - The company employs 34,010 global employees, with 34% based in the United States, emphasizing its diverse workforce[61] - The company recognizes that diversity and inclusion contribute to achieving its goals, with women making up 16% of all employees and 27% of the Board of Directors[67] Employee Safety and Health - The company has implemented various safety programs and initiatives to protect the health and safety of its employees, which is a core value[65]

Core Viewpoint - NOV is currently perceived as a shadow of its former self from over a decade ago, particularly before the oil price crash in 2015, which was influenced by OPEC's actions against U.S. shale producers [1] Group 1 - The company has not been reviewed in detail for about two years, indicating a potential gap in recent performance analysis [1]

NOV Inc. Fourth Quarter and Full Year 2024 Earnings Presentation February 5, 2025 $1.11B Adjusted EBITDA1 38% Incremental margin $953MM Safe Harbor / Forward-Looking Statements / Non-GAAP Financial Measures Statements in this presentation, including statements regarding future financial performance, are forward-looking statements within the meaning of the federal securities laws. Statements of hopes, beliefs, expectations, and predictions of future performance are subject to numerous risks and uncertainties ...

Financial Data and Key Metrics Changes - For Q4 2024, NOV reported revenues of $2.31 billion and net income of $160 million, resulting in fully diluted earnings of $0.41 per share, with EBITDA at $302 million or 13.1% of sales [5][7] - Full year 2024 revenues increased by 3% to $8.87 billion, with net income of $635 million or $1.60 per share, and EBITDA increased to $1.1 billion or 12.5% of sales [9][36] - The company achieved a book-to-bill ratio of 121% for Q4 and 122% for the full year, with a backlog growth of 22% over the past four years [8][36] Business Line Data and Key Metrics Changes - The Energy Equipment segment grew its revenue by 5% and expanded segment margins by 250 basis points, benefiting from supply chain recovery and higher margin contracts [10][12] - The Energy Products and Services segment saw modest revenue growth despite a 5% decline in global drilling activity, with margins falling 120 basis points year over year due to decreased demand for drill pipe [13][42] - Digital services gained traction, with user numbers more than doubling through 2024, indicating a strong market adoption of NOV's digital solutions [14][15] Market Data and Key Metrics Changes - North American drilling activity was down 9% year over year, while international markets remained flat, impacting the overall revenue growth [36][41] - The Middle East is expected to see mixed activity, with declines in Saudi Arabia offset by increases in Kuwait, UAE, and Oman, while Latin America, particularly Brazil, remains strong [22][30] - Offshore drilling customers are concerned about lower utilization rates, but there is optimism for increased contracting activity in the second half of 2025 [25][26] Company Strategy and Development Direction - NOV aims to capitalize on growing demand for deepwater exploration and production equipment, with a focus on enhancing its technology leadership and market share [11][20] - The company is actively increasing its fleet of proprietary drill bits and downhole tools to respond to market demand, expecting further share gains despite North American activity softness [21][30] - A disciplined capital allocation strategy is in place, with a commitment to return at least 50% of excess free cash flow to shareholders [32][40] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for margin improvements in 2025, driven by better quality margins from backlog and operational efficiencies [31][72] - Concerns regarding potential oversupply and cautious spending plans among producers were noted, but management remains confident in NOV's ability to outperform activity levels [17][19] - The company anticipates a flattish environment in 2025, with expectations for margin expansion despite macroeconomic uncertainties [31][32] Other Important Information - NOV generated $953 million in free cash flow for the full year 2024, with a conversion rate of 86% from EBITDA [17][36] - The company repurchased 7.5 million shares for $112 million and paid a $29 million dividend, returning a total of $337 million to shareholders during the year [39][40] - The backlog for the Energy Equipment segment ended 2024 at $4.43 billion, up 7% from the previous year, despite currency impacts [58][60] Q&A Session Summary Question: Guidance on margin improvement for 2025 - Management acknowledged various headwinds but remains optimistic about margin increases, particularly in the Energy Equipment segment, which saw significant year-over-year margin growth [70][72] Question: Return of capital strategy and free cash flow expectations - Management confirmed a commitment to return at least 50% of excess free cash flow to shareholders, with expectations for continued strong free cash flow generation in 2025 [85][92] Question: Outlook for the offshore market and contracting activity - Management noted mixed signals in the offshore market, with expectations for improved contracting activity in 2026, while current demand remains stable [99][101]

Core Insights - NOV Inc. reported fourth-quarter 2024 adjusted earnings of 41 cents per share, exceeding the Zacks Consensus Estimate of 35 cents, but down from 54 cents in the same quarter last year [1] - Total revenues for the quarter were $2.3 billion, surpassing the Zacks Consensus Estimate by 3.2%, although this represents a 1.5% decline from the previous year [2] Financial Performance - The Energy Products and Services segment generated revenues of $1.1 billion, beating expectations but down 1.2% year-over-year, attributed to reduced global drilling activity [4] - The Energy Equipment segment's revenues decreased 1.4% year-over-year to $1.3 billion, missing estimates by 5.3%, primarily due to the sale of its Pole Products business and lower aftermarket support revenues [5] - Adjusted EBITDA for the Energy Equipment segment increased to $159 million from $124 million year-over-year, although it was below the estimate of $161.9 million [6] Shareholder Returns - In Q4 2024, NOV repurchased 7.5 million shares for $112 million, totaling 14.2 million shares repurchased for $229 million throughout the year, returning $337 million in capital to shareholders [3] Backlog and Orders - As of December 31, 2024, the backlog for Energy Equipment capital orders was $4.4 billion, an increase of $279 million from the prior year, with new orders of $757 million in the quarter, reflecting a year-over-year increase of $129 million [7][6] Balance Sheet - As of December 31, 2024, NOV had cash and cash equivalents of $1.2 billion and long-term debt of $1.7 billion, with a debt-to-capitalization ratio of 20.9% [8] - The company generated $591 million in operating cash flow and $473 million in free cash flow during the quarter [8] Future Outlook - For Q1 2025, NOV anticipates a year-over-year revenue decline of 1-3%, with adjusted EBITDA expected between $235 million and $265 million [10] - The company expects a challenging macro environment and geopolitical uncertainties to lead to flat-to-lower global industry activity in 2025, but believes its backlog of higher-margin projects will drive profitability improvements [11]

Revenue and Income - Fourth quarter 2024 revenues were $2.31 billion, a decrease of 1% year-over-year, while full-year revenues increased to $8.87 billion, up $287 million from 2023[3][4] - Fourth quarter net income was $160 million, or $0.41 per diluted share, compared to $598 million in the same quarter last year, which included a $485 million tax asset release[3][5] - Total revenue for the three months ended December 31, 2024, was $2,308 million, an increase from $2,191 million in the same period of 2023, representing a growth of 5.4%[35] - Net income attributable to the company for the three months ended December 31, 2024, was $160 million, a decrease from $598 million in the same period of 2023, indicating a decline of 73.3%[35] - GAAP net income attributable to the company for Q4 2024 was $160 million, compared to $598 million in Q4 2023, a decrease of 73.3%[45] Cash Flow and Capital - The company generated $591 million in cash flows from operations in the fourth quarter, with Free Cash Flow of $473 million, and for the full year, cash flows from operations were $1.30 billion with Free Cash Flow of $953 million[5][6] - Free Cash Flow for the year ended December 31, 2024, was $953 million, compared to a negative $140 million in 2023, showing a significant improvement[42] - Cash and cash equivalents at the end of the period increased to $1,230 million from $816 million, marking a growth of 50.7%[38] - The company plans to return at least 50% of Excess Free Cash Flow to shareholders annually, with $337 million returned in 2024[6][12] Operating Performance - Adjusted EBITDA for the fourth quarter was $302 million, representing 13.1% of sales, while full-year Adjusted EBITDA increased 11% to $1.11 billion, or 12.5% of sales[3][4] - Adjusted EBITDA for the year ended December 31, 2024, was $1.110 billion, compared to $1.001 billion in 2023, reflecting a 10.9% growth[45] - Operating profit for the three months ended December 31, 2024, was $207 million, compared to $194 million in the same period of 2023, reflecting an increase of 6.7%[35] - Total operating profit for Q4 2024 reached $207 million, up from $161 million in Q4 2023, representing a 28.6% increase[45] - The total operating profit percentage for the year improved to 9.9% from 7.6% in the previous year[45] Equipment Orders and Backlog - Capital equipment orders for the fourth quarter totaled $757 million, resulting in a book-to-bill ratio of 121%, while full-year capital equipment orders reached $2.75 billion, with a book-to-bill of 122%[5][9] - The backlog for capital equipment orders as of December 31, 2024, was $4.43 billion, an increase of $279 million from the previous year[9] Investments and Acquisitions - Business acquisitions net of cash acquired for the year ended December 31, 2024, amounted to $298 million, compared to $22 million in 2023, indicating increased investment in growth[42] Market Position and Strategy - NOV secured multiple contracts for advanced gas processing and water treatment equipment for newbuild FPSO units, highlighting its strong position in the offshore production equipment market[14] - The company is focusing on energy-efficient rig technologies and automation through a tri-party MoU in Malaysia, aiming to enhance operational efficiencies and safety[20] Financial Ratios and Margins - Gross profit for the year ended December 31, 2024, was $2,010 million, compared to $1,833 million in 2023, reflecting a year-over-year increase of 9.7%[35] - The company reported a gross profit margin of 21.4% for the year ended December 31, 2024, consistent with the previous year[35] - Energy Products and Services operating profit margin improved to 10.6% in Q4 2024 from 8.8% in Q4 2023[45] - Energy Products and Services adjusted EBITDA margin was 16.3% in Q4 2024, down from 18.0% in Q4 2023[45] Expenses and Liabilities - Total depreciation and amortization expenses for the year were $343 million, compared to $302 million in 2023, indicating a 13.6% rise[45] - Total liabilities decreased to $4,933 million as of December 31, 2024, from $5,052 million in 2023, representing a reduction of 2.4%[37] - Corporate costs and eliminations totaled $56 million in Q4 2024, compared to $46 million in Q4 2023, reflecting an increase of 21.7%[45]

Core Insights - Nov Inc. reported revenue of $2.31 billion for the quarter ended December 2024, a decrease of 1.5% year-over-year, with EPS at $0.41 compared to $0.54 in the same quarter last year [1] - The revenue exceeded the Zacks Consensus Estimate of $2.24 billion by 3.19%, while the EPS surpassed the consensus estimate of $0.35 by 17.14% [1] Financial Performance Metrics - Nov Inc.'s shares have returned -3.3% over the past month, underperforming the Zacks S&P 500 composite's +1% change, and currently holds a Zacks Rank 5 (Strong Sell) [3] - Energy Equipment backlog was reported at $4.43 billion, slightly below the estimated $4.52 billion [4] - New orders booked in Energy Equipment totaled $757 million, exceeding the average estimate of $659.37 million [4] - Orders shipped from backlog in Energy Equipment amounted to $628 million, surpassing the estimated $614.70 million [4] - The Book-to-Bill ratio for Energy Equipment was 121%, higher than the average estimate of 112.3% [4] - Revenue from Energy Products and Services was $1.06 billion, above the average estimate of $1.04 billion [4] - Revenue from Eliminations was reported at -$39 million, worse than the average estimate of -$32.65 million, reflecting a year-over-year change of -22% [4] - Revenue from Energy Equipment reached $1.29 billion, exceeding the average estimate of $1.23 billion [4] - Adjusted EBITDA for Eliminations and corporate costs was -$56 million, compared to the average estimate of -$47 million [4] - Adjusted EBITDA for Energy Equipment was $185 million, surpassing the average estimate of $160.06 million [4] - Adjusted EBITDA for Energy Products and Services was $173 million, slightly below the average estimate of $179.19 million [4]

Nov Inc. (NOV) came out with quarterly earnings of $0.41 per share, beating the Zacks Consensus Estimate of $0.35 per share. This compares to earnings of $0.54 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 17.14%. A quarter ago, it was expected that this oil and gas industry supplier would post earnings of $0.35 per share when it actually produced earnings of $0.33, delivering a surprise of -5.71%.Over the last four quarters ...