NOV(US:NOV)2019-07-30 20:36Financial Data and Key Metrics Changes - In Q2 2019, National Oilwell Varco (NOV) reported revenues of $2.132 billion, a 10% sequential increase and a 1% year-on-year increase; adjusted EBITDA was $195 million, up $55 million sequentially, representing a 29% incremental leverage to Q1 2019 results [6][7] - The company experienced a net loss of $5.39 billion, or $14.11 per share, primarily due to a significant impairment charge [6][19] Business Segment Data and Key Metrics Changes - The Wellbore Technologies segment generated $850 million in revenue, a 5% sequential increase, with EBITDA margins of 15.8% [20] - The Completion & Production Solutions segment saw revenues of $663 million, a 14% sequential increase, with EBITDA margins of 7.8% [28] - The Rig Technologies segment reported revenues of $671 million, an 11% sequential increase, with a book-to-bill ratio of 109% [35] Market Data and Key Metrics Changes - International markets accounted for 66% of the drill pipe business unit's revenue, up from 42% in Q2 2018; offshore markets reached 45%, up from 17% a year ago [22] - Consolidated company book-to-bill ratio was 1.3 times, reflecting improvements in international and offshore markets [17] Company Strategy and Development Direction - The company aims to achieve $160 million in annualized cost savings by the end of 2020, focusing on rightsizing the organization and improving operational efficiencies [12][14] - NOV is positioning its businesses strategically by developing new products and technologies to maximize competitive advantage and improve capital efficiency [15][16] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about improved order rates and steady recovery in international markets, despite challenges in North America [15][16] - The company is focused on reducing working capital intensity and expects to generate $300 million to $500 million in free cash flow in the second half of the year [20][81] Other Important Information - The company recognized a $5.8 billion impairment charge primarily against goodwill and intangible assets, which will reduce Q3 depreciation and amortization expenses [19] - Management highlighted the importance of technological innovation in gaining market share and driving revenue growth [23][24] Q&A Session Summary Question: Growth accelerators and international activity - Management noted progress on growth accelerators and highlighted outperformance in both North America and international markets, driven by new products and technologies [45][46] Question: International business growth expectations - Management expressed cautious optimism about continued improvement in international markets but refrained from providing specific quantitative guidance [49][51] Question: U.S. business outlook - Management acknowledged the U.S. market's challenges but indicated that the company is well-positioned to support customer needs as they destock [53][55] Question: Free cash flow and working capital targets - Management confirmed that the target for working capital remains at 35%, despite challenges associated with international sales [61][62] Question: M&A strategy - Management indicated a more selective approach to M&A in the current market environment, focusing on capital efficiency and targeted transactions [75][76]