Key Highlights

  • Third-quarter EPS was $0.25 against a $0.25 estimate as screened, a 0.05% surprise as screened.
  • The third-quarter guide was revenue flat to up 2% year over year and adjusted EBITDA of $240 million to $270 million.
  • Second-quarter adjusted EBITDA was $283 million, a 13.3% margin that included about $40 million of tariff refunds.
  • Second-quarter revenue was $2.134 billion, up 4% sequentially and down 2% from a year earlier.
  • Capital equipment backlog was $4.08 billion at June 30, with second-quarter orders of $474 million.

NOV Earnings: Did Q3 EPS of $0.25 Meet the Company's Own EBITDA Guide?

NOV (NYSE:NOV) scheduled its third-quarter results for after the market close on Tuesday, October 27, with the conference call on Wednesday, October 28, at 10 a.m. Central Time. As screened, EPS of $0.25 matched a $0.25 estimate, a 0.05% surprise, on a market capitalization of about $7.33 billion.

The yardstick set by management in July was revenue flat to up 2% year over year and adjusted EBITDA of $240 million to $270 million. That guide assumed Middle East operating conditions would stay consistent with the second quarter, and the release said a worsening could cause results to differ materially. No fourth-quarter guidance was given at that time.

NOV supplies equipment and technology to oil and gas drilling, completion and production operations, reporting through Energy Equipment and Energy Products and Services segments.

NOV Second Quarter: How Much of the $283 Million EBITDA Was Tariff Refunds?

Second-quarter revenue was $2.134 billion, up 4% from $2.052 billion in the first quarter and down 2% from $2.188 billion a year earlier. Adjusted EBITDA was $283 million, up from $252 million, for a 13.3% margin versus 11.5%. About $40 million of that came from tariff refunds, so the figure excluding them was roughly $243 million (calculated).

That calculation matters because the third-quarter guide of $240 million to $270 million sits close to the underlying second-quarter base. GAAP diluted EPS was $0.31 versus $0.29, and net income attributable to the company was $112 million. Operating profit was $193 million, a 9.0% margin.

NOV Segments and Cash: Where Are Orders, Backlog and Free Cash Flow?

Energy Equipment revenue was $1.218 billion, up 1%, with adjusted EBITDA of $200 million, a 16.4% margin. Orders booked were $474 million against $638 million shipped from backlog, a 74% book-to-bill, and capital equipment backlog was $4.08 billion, down $220 million from a year earlier.

Energy Products and Services revenue fell 5% to $974 million on lower capital equipment sales, partly offset by share gains in drill bits and artificial lift and growth in digital services. Segment adjusted EBITDA was $144 million, a 14.8% margin.

Free cash flow was negative $64 million after a $174 million working capital use, and six-month free cash flow was negative $155 million. NOV returned $127 million in the quarter, including $63 million of buybacks of about 3.2 million shares. Cash was $1.164 billion against total debt of $1.706 billion, implying net debt of about $542 million (calculated), with $1.50 billion available on the revolver.

NOV Call Agenda: What to Watch After the October 28 Discussion?

Management has framed the market as one of improving underlying fundamentals, with a growing pipeline of capital equipment opportunities and improving short-cycle activity, while price volatility and geopolitical uncertainty cause temporary project deferrals. Energy Products and Services management expected first-half orders to support higher second-half shipments.

Watch for fourth-quarter guidance, orders against the $4.08 billion backlog, working capital reversal, and how much tariff refund benefit remains.