NOV Q4 Earnings Surpass Estimates, Revenues Decrease Y/Y

NOV Inc. NOV reported fourth-quarter 2024 adjusted earnings of 41 cents per share, which beat the Zacks Consensus Estimate of 35 cents. This outperformance can be attributed to better-than-expected cost control and higher-margin projects in its Energy Equipment segment. However, the bottom line decreased from the year-ago quarter’s 54 cents.Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.The oil and gas equipment and services company’s total revenues of $2.3 billion beat the Zacks Consensus Estimate by 3.2%, driven by stronger-than-expected revenues from Energy Equipment segment and Energy Products and Services segment, which surpassed Zacks Consensus marks by 5.1% and 1.9%, respectively. However, revenues declined 1.5% from the year-ago quarter’s figure.In the fourth quarter, NOV repurchased 7.5 million shares of common stock for $112 million. For the year, the company repurchased a total of 14.2 million shares, amounting to $229 million. Including dividends, NOV returned $337 million in capital to its shareholders in 2024. The company recorded $7 million in Other Items, mainly due to severance and facility closure costs during the same time.NOV Inc. Price, Consensus and EPS Surprise NOV Inc. price-consensus-eps-surprise-chart | NOV Inc. QuoteSegmental Performances of NOVEnergy Products and Services: The unit reported fourth-quarter revenues of $1.1 billion, which beat our prediction of $1 billion. However, the figure decreased from the prior-year quarter’s reported number by 1.2%, due to reduced global drilling activity.Adjusted EBITDA of $173 million was below our estimate of $181.5 million. The reported actuals also decreased from $197 million in the corresponding period of 2023.Energy Equipment: Revenues in this segment decreased 1.4% year over year to $1.3 billion, missing our estimation by 5.3%. The drop in revenues was mostly because the company sold its Pole Products business in early 2024 and saw lower revenues from aftermarket support.Adjusted EBITDA of $159 million increased from the year-earlier quarter’s $124 million. The segment's revenues and profitability increased because of the successful execution of higher-margin projects from its backlog. However, the figure was lower than our estimate of $161.9 million.This segment experienced strong demand with new orders of $757 million in the quarter, indicating an increase of $129 million from a year ago, resulting in a book-to-bill ratio of 121%.As of Dec. 31, the backlog for Energy Equipment capital orders was $4.4 billion, indicating an increase of $279 million from the prior year.NOV’s Balance SheetAs of Dec. 31, 2024, the company had cash and cash equivalents of $1.2 billion and long-term debt of $1.7 billion with a debt-to-capitalization of 20.9%. The company had $1.5 billion available on its primary revolving credit facility during the same time.This Zacks Rank #5 (Strong Sell) company generated $591 million in operating cash flow and $473 million in free cash flow in this quarter.You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.NOV’s OutlookThe company aims to return at least 50% of excess free cash flow (calculated as cash flows from operations minus capital expenditures and other investments, such as acquisitions and divestitures) through a combination of regular quarterly dividends, opportunistic stock repurchases and supplemental dividend to adjust annual returns to its shareholders.For the first quarter of 2025, NOV expects year-over-year consolidated revenues to decline 1-3%, with adjusted EBITDA estimated to be between $235 million and $265 million.The company expects a tougher macro environment and geopolitical uncertainties will result in flat-to-lower global industry activity in 2025. However, NOV believes its growing backlog of higher-margin offshore production-related capital equipment, coupled with the ongoing market adoption of new technologies, will drive profitability improvements and generate robust cash flow throughout the year.Important Earnings at a GlanceWhile we have discussed NOV’s fourth-quarter results in detail, let us take a look at three other key reports of this space.Oil and gas equipment and services provider Liberty Energy LBRT reported a fourth-quarter 2024 adjusted net income of 10 cents per share, which marginally beat the Zacks Consensus Estimate of 9 cents, due to a year-over-year decrease in costs and expenses.  However, the bottom line underperformed the year-ago quarter’s reported figure of 54 cents, due to poor equipment and service execution, along with lower activity.As of Dec. 31, Liberty had approximately $20 million in cash and cash equivalents. The pressure pumper’s long-term debt of $190.5 million represented a debt-to-capitalization of 8.8%.Another oil and gas equipment and services provider Halliburton Company HAL posted a fourth-quarter 2024 adjusted net income per share of 70 cents, same as the Zacks Consensus Estimate but below the year-ago quarter’s profit of 86 cents (adjusted). The numbers indicated softer activity in the region of North America, partly offset by improved fluid work in the Gulf of Mexico.As of Dec. 31, 2024, the company had approximately $2.6 billion in cash/cash equivalents and $7.2 billion in long-term debt, representing a debt-to-capitalization ratio of 40.4. The company generated $1.5 billion of cash flow from operations in the fourth quarter, leading to a free cash flow of $1.1 billion. Energy infrastructure provider Kinder Morgan KMI reported fourth-quarter adjusted earnings per share of 32 cents, shy of the Zacks Consensus Estimate of 33 cents. The lower-than-expected quarterly earnings were primarily due to decreased volumes on certain systems, asset divestitures and lower crude, CO2 and NGL volumes. KMI’s fourth-quarter DCF was $1.3 billion, up from $1.2 billion a year ago.As of Dec. 31, 2024, Kinder Morgan reported $88 million in cash and cash equivalents. Its long-term debt amounted to $29.8 billion at the quarter-end. For 2025, Kinder Morgan anticipates a net income of $2.8 billion, up 8% from the prior-year level, and an adjusted EPS of $1.27, up 10%. The company expects to declare dividends of $1.17 per share, up 2% from the prior-year figure. It also anticipates budgeted adjusted EBITDA of $8.3 billion, up 4% from the previous-year level.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Halliburton Company (HAL): Free Stock Analysis Report NOV Inc. (NOV): Free Stock Analysis Report Kinder Morgan, Inc. (KMI): Free Stock Analysis Report Liberty Energy Inc. (LBRT): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks