NOV(US:NOV)2024-04-26 17:01Financial Performance - For Q1 2024, NOV generated revenues of $2.16 billion, a 10% increase compared to Q1 2023, with net income of $119 million, or 5.5% of sales[96] - Adjusted EBITDA for Q1 2024 increased 24% year-over-year to $241 million, representing 11.2% of sales[96] - Total operating profit for the three months ended March 31, 2024, was $162 million, up from $126 million in the same period of 2023, resulting in an operating profit margin of 7.5%[119] - Adjusted EBITDA for the three months ended March 31, 2024, was $241 million, compared to $195 million in 2023, with an Adjusted EBITDA margin of 11.2%[119] Segment Performance - The Energy Products and Services segment reported revenues of $1,017 million, an 8% increase from Q1 2023, with an operating profit of $121 million, or 11.9% of sales[97] - The Energy Equipment segment generated revenues of $1,178 million, a 12% increase from Q1 2023, with an operating profit of $95 million, or 8.1% of sales[98] Orders and Backlog - New orders booked in Q1 2024 totaled $390 million, resulting in a book-to-bill ratio of 77% compared to $507 million of orders shipped from backlog[99] - As of March 31, 2024, the backlog for capital equipment orders in the Energy Equipment segment was $3,955 million, an increase of $115 million from Q1 2023[99] - The capital equipment backlog was $3,955 million as of March 31, 2024, an increase of $115 million from $3,840 million at March 31, 2023, with approximately 36% expected to convert to revenue in 2024[112] Market Conditions - Active drilling rigs worldwide decreased by 5.4% year-over-year to 1,797 in Q1 2024, while U.S. active rigs decreased by 18.1%[103] - The average price of West Texas Intermediate crude oil was $77.56 per barrel in Q1 2024, a 1.9% increase from Q1 2023[103] - Natural gas prices fell to $2.13 per mmbtu in Q1 2024, a 19.6% decrease compared to Q1 2023[103] Future Outlook - Management anticipates continued growth in energy transition projects, including wind energy and carbon sequestration, as low carbon power becomes a larger portion of the global energy supply[104] Tax and Cash Flow - The effective tax rate for the three months ended March 31, 2024, was 26.7%, significantly higher than 13.8% for the same period in 2023[115] - Cash and cash equivalents decreased to $468 million as of March 31, 2024, from $816 million at December 31, 2023, while total debt increased to $1,808 million[121] - Net cash used in operating activities was $78 million for the three months ended March 31, 2024, primarily due to changes in working capital[125] Shareholder Returns - The company plans to return at least 50% of excess free cash flow through dividends and share repurchases, with a 50% increase in the quarterly cash dividend from $0.05 to $0.075 per share[128] Debt and Credit Facilities - The company has a revolving credit facility with a borrowing capacity of $2.0 billion, with a debt-to-capitalization ratio of 24.5% as of March 31, 2024[122] - The company has $1.95 billion available under its credit facility with no outstanding letters of credit as of March 31, 2024[137] - The joint venture has a $150 million bank line of credit for facility construction in Saudi Arabia, with interest based on SOFR plus 1.40%[137] - The company aims to maintain a portion of its debt in variable rate borrowings for flexibility and lower overall costs compared to fixed-rate borrowings[137] Foreign Exchange Exposure - The company recorded a foreign exchange loss of $6 million in Q1 2024, compared to a $9 million loss in the same period of the previous year[133] - The company has transactional exposures totaling $475 million and translation exposures totaling $309 million in foreign currencies as of March 31, 2024[135] - A hypothetical 10% movement in foreign currency exchange rates could affect net income by $37 million and Other Comprehensive Income by $31 million[135]