Key Takeaways OII Q4 EPS beat estimates, driven by Subsea Robotics and ADTech strength.Revenues fell 6.3% on weaker energy activity; Offshore Projects slid 29%.OII sees softer Q1 2026 sales, but guides for modest full-year revenue growth.Oceaneering International, Inc. (OII) reported an adjusted profit of 45 cents per share for the fourth quarter of 2025, beating the Zacks Consensus Estimate of 44 cents. Moreover, the bottom line surpassed the year-ago quarter’s reported figure of 37 cents. This was driven ...

Core Insights - TechnipFMC plc (FTI) reported fourth-quarter 2025 adjusted earnings of 70 cents per share, exceeding the Zacks Consensus Estimate of 51 cents and up from 54 cents in the previous year [1][8] - The company's revenues for the quarter were $2.5 billion, slightly missing the Zacks Consensus Estimate by $25 million but increasing from $2.4 billion year-over-year [2][8] - FTI's inbound orders decreased by 11.5% year-over-year to $2.6 billion, while the backlog rose 15.3% to $16.6 billion [3][8] Financial Performance - Adjusted EBITDA for the Subsea unit was $415.6 million, missing the estimate of $421 million, while the Surface Technologies unit's EBITDA was $58.2 million, beating the estimate of $53 million [2] - Total costs and expenses for the quarter were $2.25 billion, up 4% from $2.16 billion in the previous year [7] - The company generated $453.6 million in cash flow from operations and reported free cash flow of $359.1 million [7] Segment Analysis - Subsea segment revenues totaled $2.2 billion, a 7.1% increase from $2 billion year-over-year, driven by higher activity in the Asia Pacific, although it missed projections by 1.4% [5] - Surface Technologies segment revenues were $322.8 million, up 1.1% year-over-year, exceeding projections of $322 million, with inbound orders increasing by 10.1% [6] Shareholder Returns - FTI repurchased 3.9 million common shares for $168.1 million during the quarter, with total shareholder returns amounting to $188.3 million, including a dividend payment of $20.2 million [4] 2026 Outlook - The company expects Subsea revenues in the range of $9.2-$9.6 billion for 2026, up from the previous guidance of $9.1-$9.5 billion, and Surface Technologies revenues between $1.15 billion and $1.3 billion [9] - Anticipated adjusted EBITDA margins are 21-22% for Subsea and 16.5-18% for Surface Technologies [9][10] - FTI projects free cash flow for 2026 to be between $1.3 billion and $1.45 billion, with annual capital expenditure around $340 million [10]

Core Viewpoint - Heritage Global Partners and Prestige Auctions will conduct an online auction for the complete closure of the NOV Dayton Chemineer facility, featuring a range of high-quality manufacturing equipment, scheduled for March 12, 2026 [1]. Auction Details - The auction will include late-model CNC machining and fabrication systems, inspection and finishing equipment, and other assets that represent the full production workflow of the facility [1]. - Key auction items include large-capacity CNC lathes, milling machines, and various support equipment, appealing to buyers in sectors such as aerospace, energy, and general manufacturing [1]. Market Context - The auction is expected to attract significant interest from both North American and international buyers, reflecting a continued demand for high-quality used manufacturing equipment as companies look for cost-effective capacity expansion [1]. - Pre-auction offers are being accepted for select major assets, with equipment inspections scheduled for March 11, 2026 [1]. Company Background - Heritage Global Partners is a subsidiary of Heritage Global Inc. (NASDAQ: HGBL), specializing in asset advisory and auction services across various industrial sectors, conducting 150-200 auction projects annually [1]. - Prestige Auctions is recognized as a leader in the procurement and sales of used metalworking machinery and complete manufacturing facilities, providing customized asset management solutions since 1990 [1].

Key Takeaways EXE posted Q4 EPS of $2, topping estimates as revenues climbed to $2.3B from $1.6B a year ago.Natural gas output rose 17% and realized prices jumped 33.9%, lifting cash flow to $956M.EXE guides 2026 production up to 7,600 MMcfe/day and plans debt cuts while funding dividends.Expand Energy Corporation (EXE) reported fourth-quarter 2025 adjusted earnings per share of $2, beating the Zacks Consensus Estimate of $1.89. The company’s bottom line increased from the year-ago adjusted profit of 55 cen ...

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Core Insights - NOV achieved a full-year book-to-bill ratio of approximately 91% with a 15% increase in revenue from backlog, ending 2025 with a total backlog of $4.34 billion, driven by offshore production technologies [1][6] - The company reported fourth-quarter revenue of $2.28 billion and a GAAP net loss of $78 million, while full-year revenue was $8.74 billion with a GAAP net income of $145 million [4][7] - Free cash flow for 2025 was reported at $876 million, with over 85% of EBITDA converted to cash, marking the best two-year free cash flow performance in a decade [7][9] Financial Performance - Fourth-quarter revenue rose 5% sequentially but fell 1% year-over-year, against a global drilling activity decline of 6%, with adjusted EBITDA totaling $267 million [3] - Tariff expenses were approximately $25 million in Q4 and expected to rise slightly in Q1, impacting overall financial performance [5][10] - Adjusted operating profit for Q4 was $177 million, or 7.8% of sales, with a higher effective tax rate affecting net loss [8] Segment Performance - In the Energy Equipment segment, fourth-quarter revenue was $1.33 billion, up 7% sequentially and 4% year-over-year, with adjusted EBITDA of $180 million [12] - Energy Products and Services reported fourth-quarter revenue of $989 million, up 2% sequentially but down 7% year-over-year, with adjusted EBITDA of $140 million [15] - Record performance in subsea flexible pipe was noted, with backlog doubling since the end of 2023 and annual shipments increasing by about 50% [14] Market Outlook - The outlook for 2026 is cautious, with expectations of a challenging environment due to oversupply in the oil market, but a potential rebalancing in the second half of the year [17] - In the U.S., activity is expected to decline mid-single digits year-over-year, while international activity is anticipated to be flat to slightly up [18] - Long-term opportunities in Venezuela were highlighted, with new orders exceeding past revenue generation, contingent on governance and security conditions [19] Capital Allocation and Cost Management - The company repurchased $85 million in shares during Q4, totaling $505 million returned to shareholders in 2025 [5][20] - A $100 million cost-out program is in progress, aiming for over $100 million in annualized savings by the end of 2026 [22] - For 2026, NOV expects slightly lower revenue year-over-year, with capital expenditures projected between $315 million and $345 million [23]

Core Viewpoint - The non-metal composite pipe industry is experiencing significant growth driven by increasing demand in various sectors such as oil and gas, municipal water supply, and marine engineering, with a projected global market size of approximately $10.7 billion in 2024, expected to reach $16.1 billion by 2031, reflecting a CAGR of 5.85% from 2025 to 2031 [4][10]. Market Overview - The global non-metal composite pipe market is expected to grow from $10.7 billion in 2024 to $16.1 billion by 2031, with a CAGR of 5.85% during 2025-2031 [4]. - China is projected to hold a 15.45% share of the global market in 2024, with an expected CAGR of 8.47% over the next six years, reaching $2.95 billion by 2031 [7]. - Europe is the largest production region for non-metal composite pipes, holding approximately 28% of the market share, followed by China at around 25% [7]. Industry Drivers - The growth of the non-metal composite pipe industry is driven by downstream market demand, technological advancements, policy support, and cost and lifespan advantages [10]. - There is a growing need for corrosion-resistant, lightweight, and low-maintenance piping materials in sectors such as oil and gas, chemicals, and municipal engineering, particularly for large infrastructure and energy projects [10]. - Advances in production processes, including high-performance resins and automated winding techniques, have improved product reliability and consistency, enabling composite pipes to gradually replace steel pipes in high-pressure and corrosive environments [10]. Industry Characteristics - The most widely used non-metal pipe is the fiberglass pipe due to its cost-effectiveness, while reinforced thermoplastic composite pipes (RTP) are known for their strong compressive strength in harsh environments [11]. - The primary application of non-metal pipes remains in oil and gas extraction and transportation, followed by municipal water supply systems [11]. - The industry is characterized by intense competition, especially in low-end products, due to low entry barriers [11]. Supply Chain Analysis - Raw materials are a significant cost component in the production of non-metal composite pipes, making procurement strategies crucial for maintaining competitive advantage [13]. - The supply chain includes a mix of global suppliers and regional manufacturers, with major players like TechnipFMC and Wellstream dominating the market [14]. Downstream Applications - Non-metal composite pipes are widely used in oil and gas, chemicals, municipal water supply, marine engineering, and industrial systems [15]. - In the oil and gas sector, composite pipes are utilized for gathering lines and injection systems, replacing some steel pipes due to their corrosion resistance and lightweight properties [15]. - The trend is shifting towards high-end and emerging applications, such as offshore wind energy and hydrogen transport, indicating a broad and multi-layered downstream application landscape [15]. Development Factors - Favorable market demand in sectors like oil and gas and municipal infrastructure is creating significant procurement opportunities [16]. - Supportive policies and environmental regulations are promoting the adoption of low-maintenance composite pipe solutions [16]. - Technological advancements continue to enhance product reliability and reduce costs, further driving industry growth [16]. Challenges - High technical and certification barriers exist, as compliance with industry standards can be costly and time-consuming, hindering rapid expansion [17]. - The recycling and sustainability of composite materials remain underdeveloped, posing potential future regulatory challenges [17]. Policy Environment - The "Medium and Long-term Oil and Gas Pipeline Network Planning" outlines strategic development for oil and gas infrastructure in China, emphasizing the importance of composite materials in future projects [18]. - The "14th Five-Year Plan for Renewable Energy Development" aims to increase the share of non-fossil energy consumption, indirectly supporting the composite pipe industry [20].

Core Insights - NOV Inc. is a prominent provider of equipment and technology for the global energy sector, with a diverse portfolio that includes oilfield services, drilling systems, and production solutions, positioning it competitively in both traditional and renewable energy markets [1][3] Group 1: Company Overview - The company serves a wide range of clients, including oil and gas producers, drilling contractors, and industrial clients, focusing on both onshore and offshore operations [2] - NOV generates revenue through manufacturing and selling equipment, as well as providing services such as repair, rentals, technical support, and remote monitoring across three main segments: Wellbore Technologies, Completion & Production Solutions, and Rig Technologies [2][11] Group 2: Financial Performance - As of the latest report, NOV's shares were priced at $17.56, reflecting a 24.8% increase over the past year, outperforming the S&P 500 by 5.41 percentage points [3] - In the third quarter, NOV reported bookings of $951 million, resulting in a 141% book-to-bill ratio and increasing the capital equipment backlog to $4.56 billion, indicating strong operational execution and demand [6] Group 3: Investment Activity - Oldfield Partners disclosed acquiring an additional 276,961 shares of NOV in the fourth quarter, with an estimated transaction value of $4.11 million, which increased the quarter-end value of their position by $15.68 million [4][5] - The increased stake by Oldfield Partners, now representing 22% of their holdings, signals confidence in NOV's performance and potential for future growth [6][7] Group 4: Market Position and Strategy - NOV is positioned as a key supplier benefiting from an offshore upcycle, with a focus on durability through the cycle rather than just headline growth [8] - The company's strategic mix of investments suggests a selective approach to energy sector investments, emphasizing stability and capital returns through dividends and buybacks [7]

Company Overview - Lear is a leading global supplier of automotive seating and electrical systems, serving major vehicle manufacturers with a diversified product portfolio and global presence [9] - The company generates revenue primarily through the sale of seating and E-Systems products to automotive manufacturers, targeting passenger vehicles, light trucks, and SUVs across North America, Europe, Asia, and South America [11] Financial Performance - Lear reported a total revenue of $23 billion and a net income of $535.3 million for the trailing twelve months (TTM) [5] - The company's dividend yield stands at 2.48% [5] - As of January 9, 2026, Lear's share price was $126.15, reflecting a 34% increase over the past year, outperforming the S&P 500 by 16 percentage points [4][5] Investment Activity - On January 9, 2026, Oldfield Partners LLP disclosed the purchase of 33,313 shares of Lear, valued at approximately $3.56 million based on quarterly average pricing [2][7] - The value of Oldfield's Lear position increased by $12.37 million at quarter-end, indicating both trading activity and price appreciation [3][7] - Post-transaction, Lear accounts for 20.93% of Oldfield's assets under management (AUM), making it the fund's second largest holding [4][7] Market Position - Lear's competitive positioning is supported by its extensive engineering expertise and manufacturing scale, allowing it to deliver integrated solutions that align with evolving automotive technologies [9]

Summary of Key Points from the Conference Call Industry Overview - The report focuses on the **North America Energy Services & Equipment (ESE)** sector, with a particular emphasis on the outlook for 2026 and the dynamics of oil and gas markets [1][4][10]. Core Insights and Arguments - **Market Outlook**: North America is nearing a bottom in terms of oil prices, with international onshore growth driven by OPEC activity. However, offshore growth is expected to be muted due to moderating efficiency gains [1][5]. - **Earnings and Valuations**: The ESE sector has seen a rally of approximately **30%** since the lows post-Liberation Day, resulting in year-to-date gains of about **5%**. Despite this, earnings estimates have fallen, leading to higher EV/EBITDA multiples and tighter free cash flow yields, now aligning with historical median levels [4][15]. - **Spending Trends**: North American onshore spending is expected to remain constrained, while international activity is projected to be flat in 2026 before increasing in 2027, driven by OPEC+ activity and unconventional gas opportunities [5][10][26]. - **Offshore Activity**: The outlook for offshore spending is more cautious, particularly for deepwater projects, due to anticipated efficiency gains that will limit the need for additional rigs [9][10][26]. Key Themes for 2026 - **Power and Data Centers**: There is an emerging opportunity in power generation, with demand expected to grow at a **2.6% CAGR** through 2035, driven by data center growth and electrification. Companies like HAL and LBRT are positioned to provide power solutions directly to end-users [10][35][41]. - **Oil and Gas Price Forecasts**: Oil prices are expected to decline by approximately **20%** since the start of 2025, with a forecasted surplus of **~2 mb/d** in 2026, potentially reaching **~3 mb/d** in the first half of 2026. Brent prices are anticipated to drop to around **$60/bbl** before a recovery begins in mid-2027 [10][63][64]. - **Rig Counts and Efficiency**: The total US rig count has decreased by **~7%** since the beginning of 2025, with oil-directed rigs down by **~14%** and gas-focused activity up by **25%**. Efficiency improvements have led to a reduction in drilling days per well [77][80][86]. Company-Specific Insights - **Top Picks**: HAL is identified as a top pick due to its exposure to the Middle East and power generation opportunities. The strategic partnership with VoltaGrid is highlighted as a key differentiator [14][54]. - **NOV Downgrade**: NOV has been downgraded to equal-weight due to its significant offshore capex exposure and less resilience in oil and gas production opex compared to peers [14][54]. Additional Important Points - **Investment Strategy**: The report emphasizes a preference for stocks with defensive and unique revenue streams, favoring gas over oil-focused activities and spending tied to existing production [54][43]. - **Long-term Trends**: The report notes that oil capex represents only **~55%** of revenues for the covered companies, with significant contributions from gas capex and non-upstream markets, indicating a shift in revenue dynamics [45][50]. This summary encapsulates the critical insights and projections for the North America Energy Services & Equipment sector as discussed in the conference call, highlighting both opportunities and challenges in the current market landscape.