NOV Q4 Earnings Surpass Estimates, Revenues Decrease Y/Y

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]