NOV(US:NOV)2025-10-28 20:44Financial Performance - For Q3 2025, the company generated revenues of $2.18 billion, a decrease of 1% compared to Q3 2024, with net income down 68% to $42 million, or $0.11 per share[79]. - Adjusted EBITDA for the company decreased 10% year-over-year to $258 million, representing 11.9% of sales[79]. - For the three months ended September 30, 2025, total operating profit was $107 million, a decrease from $194 million in the same period of 2024, resulting in a total operating profit margin of 4.9% compared to 8.9%[115]. - Adjusted EBITDA for the nine months ended September 30, 2025, was $762 million, down from $808 million in the same period of 2024, with an Adjusted EBITDA margin of 11.8% compared to 12.3%[115]. Segment Performance - The Energy Products and Services segment reported revenues of $971 million, a 3% decrease from Q3 2024, with operating profit down to $38 million, or 3.9% of sales[80]. - The Energy Equipment segment generated revenues of $1,247 million, a 2% increase from Q3 2024, with operating profit rising to $130 million, or 10.4% of sales[81]. - Operating profit from Energy Products and Services decreased to $38 million for Q3 2025, down from $114 million in Q3 2024, a decline of 67%[97]. - Revenue from Energy Equipment increased by $28 million or 2% to $1,247 million for Q3 2025, while year-to-date revenue slightly decreased by $1 million to $3,600 million[98]. - Operating profit from Energy Equipment was $130 million for Q3 2025, a slight increase from $129 million in Q3 2024, but decreased by $70 million year-to-date to $386 million[99]. Orders and Backlog - New orders booked during the quarter totaled $951 million, resulting in a book-to-bill ratio of 141% compared to $674 million in orders shipped from backlog[82]. - As of September 30, 2025, the backlog for capital equipment orders in the Energy Equipment segment totaled $4.56 billion, an increase of $77 million from Q3 2024[82]. - The capital equipment backlog rose to $4,555 million as of September 30, 2025, an increase of $77 million from $4,478 million a year earlier, with an expectation that approximately 14% will convert to revenue in the remainder of 2025[100]. Market Conditions - The worldwide average rig count decreased by 7.6% year-over-year to 1,798 rigs in Q3 2025, with U.S. active drilling rigs down 7.8% to 540[87]. - West Texas Intermediate crude prices averaged $65.74 per barrel in Q3 2025, a decrease of 13.8% from $76.24 in Q3 2024[87]. - The company expects continued growth in wind, geothermal, and carbon capture projects, despite macroeconomic uncertainties[88]. - Management anticipates that offshore and international resources will be the primary source for future incremental oil supplies to meet global demand[85]. Costs and Expenses - Corporate costs increased by 23% year-over-year for Q3 2025, primarily due to higher legal costs and self-insured property losses[103]. - Interest and financial costs remained stable at $22 million for Q3 2025, compared to $21 million in Q3 2024[104]. - Equity loss in unconsolidated affiliates was $(11) million for Q3 2025, compared to zero in Q3 2024, with a 7% decline in sales for the largest investment in unconsolidated affiliates[106]. - Other expense, net increased to $12 million for Q3 2025, up from $10 million in Q3 2024, primarily due to larger foreign currency fluctuations[107]. - The effective tax rate for Q3 2025 was 39.7%, up from 25.3% in Q3 2024, impacted by earnings in higher tax rate jurisdictions and losses in certain jurisdictions with no tax benefit[109]. Cash Flow and Capital Management - Cash and cash equivalents as of September 30, 2025, were $1,207 million, a slight decrease from $1,230 million at December 31, 2024, with total debt at $1,726 million[116]. - The company had net cash provided by operating activities of $678 million for the nine months ended September 30, 2025, compared to $713 million in 2024[121]. - Capital expenditures for the first nine months of 2025 were $274 million, while dividend payments totaled $163 million and share repurchases amounted to $230 million[121]. - The company expects to return at least 50% of Excess Free Cash Flow to shareholders through dividends and stock buybacks[123]. - The company may pursue additional acquisition candidates, primarily funding them through cash flow from operations and borrowings[124]. Debt and Financing - The company has a revolving credit facility with a borrowing capacity of $1.5 billion, with a debt-to-capitalization ratio of 23.5% as of September 30, 2025[117]. - A consolidated joint venture borrowed $120 million against a $150 million bank line of credit for a facility in Saudi Arabia, with $89 million in borrowings related to this line of credit as of September 30, 2025[118]. - The Company has borrowings of $1,091 million in 3.95% Senior Notes, $497 million in 3.60% Senior Notes, and other debt of $138 million as of September 30, 2025[131]. - There are no outstanding letters of credit under the Company's revolving credit facility, resulting in $1.5 billion of available funds[131]. - Interest on the bank line of credit is based on SOFR plus 1.40%[131]. - The Company aims to maintain a portion of its debt in variable rate borrowings for flexibility regarding early repayment and lower overall costs compared to fixed-rate borrowings[131]. Foreign Exchange Exposure - As of September 30, 2025, the Company had transactional exposures totaling $571 million and translational exposures totaling $443 million in foreign currencies[129]. - A hypothetical 10% movement in foreign currency exchange rates could affect net income by $45 million and Other Comprehensive Income by $44 million[129]. - The company recorded a foreign exchange loss of $42 million in the first nine months of 2025, compared to a loss of $27 million in the same period of 2024[127]. Legislative Impact - The One Big Beautiful Bill Act (OBBBA) enacted on July 4, 2025, included provisions that had no material impact on operational results for Q3 2025[110].