NOV(US:NOV)2024-07-29 16:14Financial Performance - For Q2 2024, NOV generated revenues of $2.22 billion, a 6% increase compared to Q2 2023, with net income of $226 million, or 10.2% of sales[95] - Adjusted EBITDA for Q2 2024 increased 15% year-over-year to $281 million, representing 12.7% of sales[95] - Operating profit from Energy Products and Services decreased to $128 million for Q2 2024, down from $156 million in Q2 2023, a decline of 18%[110] - Revenue from Energy Equipment increased by 8% to $1,204 million for Q2 2024, compared to $1,117 million in Q2 2023, driven by strong international sales[111] - Operating profit from Energy Equipment rose significantly to $232 million in Q2 2024, compared to $81 million in Q2 2023, an increase of 186%[112] - The effective tax rate increased to 23.9% for Q2 2024, compared to 10.8% in Q2 2023, impacted by earnings in higher tax jurisdictions and losses in others[121] - Cash and cash equivalents stood at $827 million as of June 30, 2024, with total debt at $1,748 million, reflecting a slight increase in cash from $816 million at the end of 2023[128] - Net cash provided by operating activities was $354 million for the six months ended June 30, 2024, compared to a cash usage of $274 million in the same period of 2023[132] Segment Performance - Energy Products and Services segment revenues were $1,050 million in Q2 2024, a 2% increase from Q2 2023, while operating profit decreased to $128 million, or 12.2% of sales[96] - Energy Equipment segment revenues reached $1,204 million in Q2 2024, an 8% increase from Q2 2023, with operating profit rising to $232 million, or 19.3% of sales[97] Orders and Backlog - New orders booked in Q2 2024 totaled $977 million, a significant increase of $466 million compared to $511 million in Q2 2023, resulting in a book-to-bill ratio of 177%[98] - As of June 30, 2024, the backlog for capital equipment orders in the Energy Equipment segment was $4,331 million, an increase of $472 million from the previous year[98] - The capital equipment backlog increased to $4,331 million as of June 30, 2024, up by $472 million from $3,859 million a year earlier, with expectations of approximately 25% of this backlog converting to revenue in the remainder of 2024[113] Costs and Expenditures - Interest and financial costs rose to $22 million for Q2 2024, compared to $21 million in Q2 2023, primarily due to debt borrowings[117] - Corporate costs declined by 5% in Q2 2024 compared to the same period in 2023, attributed to cost-saving initiatives[116] - Capital expenditures for the first six months of 2024 totaled $151 million, while business acquisitions net of cash were $252 million[133] Shareholder Returns - The Company repurchased 2.0 million shares of common stock at an average price of $18.50 per share and increased its base dividend by 50% during the second quarter[134] - The Company expects to return at least 50% of Excess Free Cash Flow to shareholders through dividends and stock buybacks[134] Foreign Exchange and Joint Ventures - The Company recorded a foreign exchange loss of $17 million in the first six months of 2024, compared to a loss of $35 million in the same period of the prior year[138] - The Company had transactional exposures totaling $439 million and translational exposures totaling $333 million in foreign currencies as of June 30, 2024[140] - The joint venture in Saudi Arabia borrowed $120 million against a $150 million bank line of credit, with compliance to a maximum debt-to-equity ratio of 75% as of June 30, 2024[130] Strategic Focus - NOV is focusing on developing technologies for energy transition, including projects related to wind energy and carbon sequestration, anticipating growth in these areas[102] - The Company anticipates funding future cash acquisitions primarily with cash flow from operations and borrowings, including the unborrowed portion of the revolving credit facility[135]