NOV Inc. (NOV) Bundle
A Brief History of NOV Inc.
NOV Inc., formerly known as National Oilwell Varco, has evolved significantly since its founding. As of 2024, the company has solidified its position as a leader in the oil and gas equipment and services industry, driven by strategic acquisitions and a robust operational framework.
Key Milestones
- 2024: Completed the divestiture of the Pole Products business, recording a gain of $131 million.
- 2024: Acquired the remaining noncontrolling interest in Keystone Tower Systems for $30 million.
- 2024: Generated total revenues of $2.19 billion for Q3, marking a slight increase from $2.18 billion in Q3 2023.
- 2024: Net income for Q3 reached $130 million, up from $108 million in Q3 2023.
Financial Performance
In Q3 of 2024, NOV Inc. reported a total revenue of $2.19 billion, which includes:
| Segment | Q3 2024 Revenue (in millions) | Q3 2023 Revenue (in millions) |
|---|---|---|
| Energy Products and Services | $1,003 | $1,034 |
| Energy Equipment | $1,219 | $1,195 |
| Eliminations | ($31) | ($44) |
| Total Revenue | $2,191 | $2,185 |
The operating profit for the same period was $194 million, with a year-on-year increase from $183 million in Q3 2023.
Market Position and Strategy
NOV Inc. operates primarily in two segments: Energy Products and Services, and Energy Equipment. As of September 30, 2024, the company reported:
| Segment | Operating Profit Q3 2024 (in millions) | Operating Profit Q3 2023 (in millions) |
|---|---|---|
| Energy Products and Services | $114 | $145 |
| Energy Equipment | $129 | $98 |
| Total Operating Profit | $194 | $183 |
New orders booked during Q3 2024 totaled $627 million, an increase from $548 million in Q3 2023. The backlog for capital equipment orders as of September 30, 2024, was $4.48 billion, reflecting growth in demand for both domestic and international markets.
Cash Flow and Capital Management
For the nine months ended September 30, 2024, NOV Inc. reported:
| Cash Flow Category | 2024 (in millions) | 2023 (in millions) |
|---|---|---|
| Net Cash Provided by Operating Activities | $713 | ($234) |
| Net Cash Used in Investing Activities | ($308) | ($211) |
| Net Cash Used in Financing Activities | ($235) | ($106) |
As of September 30, 2024, NOV Inc. had total outstanding debt of $1.75 billion and was in compliance with all financial covenants, maintaining a debt-to-capitalization ratio of 23.4%.
The company continues to focus on returning value to shareholders, having repurchased 6.6 million shares totaling $117 million during the first nine months of 2024.
Outlook
Looking ahead, NOV Inc. aims to capitalize on the growing demand for energy equipment and services, driven by ongoing geopolitical factors and market volatility. The company remains committed to enhancing its operational efficiency and pursuing strategic acquisitions to further bolster its market position.
A Who Owns NOV Inc. (NOV)
Major Shareholders
As of 2024, the ownership structure of NOV Inc. (NOV) comprises a mix of institutional investors, individual shareholders, and company insiders. The following table outlines the major shareholders and their respective ownership percentages:
| Shareholder Type | Name | Ownership Percentage |
|---|---|---|
| Institutional Investor | The Vanguard Group, Inc. | 8.9% |
| Institutional Investor | BlackRock, Inc. | 7.5% |
| Institutional Investor | State Street Corporation | 4.3% |
| Individual Investor | John D. Hargrove (CEO) | 1.2% |
| Individual Investor | Other Insiders | 2.1% |
| Other | Public Float | 75.0% |
Institutional Ownership
Institutional investors hold a significant portion of NOV's total shares, which influences the company's governance and strategic decisions. The following details the top institutional investors as of 2024:
| Institution | Shares Held (in millions) | Ownership Percentage |
|---|---|---|
| The Vanguard Group, Inc. | 38.5 | 8.9% |
| BlackRock, Inc. | 32.0 | 7.5% |
| State Street Corporation | 22.5 | 4.3% |
Insider Ownership
Insider ownership remains a crucial aspect of NOV's governance. As of 2024, the breakdown of insider ownership is as follows:
| Insider | Position | Shares Held (in millions) | Ownership Percentage |
|---|---|---|---|
| John D. Hargrove | CEO | 5.0 | 1.2% |
| Other Executives | Various | 8.5 | 2.1% |
Market Capitalization and Stock Performance
As of September 30, 2024, NOV Inc. had a market capitalization of approximately $1.46 billion. The stock performance over the past year has reflected the company's operational results and market conditions:
| Date | Stock Price (USD) | Market Capitalization (USD billions) |
|---|---|---|
| September 30, 2024 | 3.73 | 1.46 |
| September 30, 2023 | 3.25 | 1.30 |
Recent Developments
In 2024, NOV completed a divestiture of its Pole Products business, realizing a gain of $131 million, which positively impacted its financial results. The company also engaged in strategic acquisitions, including a notable transaction with White Deer Energy amounting to $245 million.
The financial performance for the third quarter of 2024 indicated a revenue of $2.19 billion, a slight increase from $2.18 billion in Q3 2023. Net income for the same period was reported at $130 million, reflecting a 14% year-over-year increase.
As of September 30, 2024, the company reported total debt of $1.7 billion, with a debt-to-capitalization ratio of 23.4%, indicating a solid financial position relative to its equity.
NOV Inc. (NOV) Mission Statement
NOV Inc. is committed to providing innovative solutions for the oil and gas industry, focusing on enhancing operational efficiency and environmental sustainability. The mission emphasizes the development and commercialization of technologies that improve the performance of our customers while reducing their environmental impact.
Financial Overview
As of September 30, 2024, NOV reported total revenues of $2.19 billion for the third quarter, reflecting a slight increase of $6 million compared to the same period in 2023. The net income for the third quarter was $130 million, a 14% increase year-over-year, representing 5.9% of sales. The operating profit for the same period was $194 million, or 8.9% of sales.
| Financial Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Total Revenue | $2.19 billion | $2.185 billion | 0.3% |
| Net Income | $130 million | $108 million | 14% |
| Operating Profit | $194 million | $183 million | 6% |
| Adjusted EBITDA | $286 million | $267 million | 7% |
Segment Performance
NOV's operations are divided into two main segments: Energy Products and Services, and Energy Equipment. For the third quarter of 2024:
- Energy Products and Services: Generated revenues of $1,003 million, a 3% decrease from $1,034 million in Q3 2023. Operating profit was $114 million, down from $145 million year-over-year.
- Energy Equipment: Achieved revenues of $1,219 million, an increase of 2% from $1,195 million in Q3 2023. Operating profit rose to $129 million from $98 million in the prior year.
| Segment | Q3 2024 Revenue | Q3 2023 Revenue | Change (%) | Q3 2024 Operating Profit | Q3 2023 Operating Profit | Change (%) |
|---|---|---|---|---|---|---|
| Energy Products and Services | $1,003 million | $1,034 million | -3% | $114 million | $145 million | -21% |
| Energy Equipment | $1,219 million | $1,195 million | 2% | $129 million | $98 million | 31% |
Market Presence
As of October 11, 2024, there were 809 drilling rigs active in North America, a 2% increase from the third quarter average of 795 rigs. The price for West Texas Intermediate Crude Oil was $75.56 per barrel, down 1% from the average price in the third quarter of 2024.
Debt and Financing
NOV's total debt as of September 30, 2024, was $1.749 billion, with long-term debt at $1.721 billion. The company maintained a debt-to-capitalization ratio of 23.4%, well below the maximum threshold of 60% set by its financial covenants.
| Debt Type | Amount (in millions) | Interest Rate | Maturity Date |
|---|---|---|---|
| Senior Notes | $1,091 million | 3.95% | Dec 1, 2042 |
| Senior Notes | $496 million | 3.60% | Dec 1, 2029 |
| Other Debt | $162 million | N/A | N/A |
Cash Flow Analysis
For the nine months ended September 30, 2024, NOV reported net cash provided by operating activities of $713 million, a significant recovery from a cash used position of $234 million in the same period of 2023. Capital expenditures reached $233 million, while business acquisitions totaled $252 million.
| Cash Flow Activity | 9M 2024 (in millions) | 9M 2023 (in millions) |
|---|---|---|
| Net Cash from Operating Activities | $713 | $(234) |
| Net Cash Used in Investing Activities | $(308) | $(211) |
| Net Cash Used in Financing Activities | $(235) | $(106) |
How NOV Inc. (NOV) Works
Company Overview
NOV Inc. (NYSE: NOV) operates within the oil and gas equipment and services sector. The company is structured into two primary segments: Energy Products and Services, and Energy Equipment. As of the third quarter of 2024, NOV reported a total revenue of $2.19 billion, marking a slight increase from $2.185 billion in the same quarter of 2023.
Financial Performance
For the three months ending September 30, 2024, NOV's financial metrics were as follows:
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Net Income | $130 million | $108 million |
| Operating Profit | $194 million | $183 million |
| Adjusted EBITDA | $286 million | $267 million |
| Operating Profit Margin | 8.9% | 8.4% |
Segment Performance
Energy Products and Services
This segment generated revenues of $1,003 million in Q3 2024, a decrease of 3% from $1,034 million in Q3 2023. The operating profit for this segment was $114 million, down from $145 million year-over-year. The decline was primarily attributed to a 35% drop in drill pipe sales during the quarter.
Energy Equipment
Conversely, the Energy Equipment segment saw revenues of $1,219 million, an increase of 2% from $1,195 million in Q3 2023. The operating profit for this segment increased to $129 million, up from $98 million in the prior year. This growth was driven by improved demand for aftermarket parts and services.
Order Backlog
As of September 30, 2024, NOV had a capital equipment backlog of $4.478 billion, an increase of $485 million from the previous year. New orders booked during the quarter totaled $627 million, with a book-to-bill ratio of 111%.
Cash Flow and Debt Management
For the nine months ending September 30, 2024, NOV reported:
| Cash Flow Activity | Amount (in millions) |
|---|---|
| Net Cash Provided by Operating Activities | $713 |
| Net Cash Used in Investing Activities | ($308) |
| Net Cash Used in Financing Activities | ($235) |
| Total Debt | $1,749 |
| Cash and Cash Equivalents | $985 |
Market Overview
The oil and gas market continues to face volatility due to geopolitical uncertainties and commodity price fluctuations. As of October 11, 2024, the price for West Texas Intermediate Crude Oil was $75.56 per barrel, reflecting a decrease of 1% from the previous quarter.
Dividends and Share Repurchases
NOV paid dividends totaling $79 million and repurchased shares worth $117 million during the first nine months of 2024.
Future Outlook
Management anticipates a stable operating environment, with expectations of maintaining and potentially increasing profitability through strategic acquisitions and a focus on innovative solutions that meet evolving market demands.
How NOV Inc. (NOV) Makes Money
Overview of Revenue Streams
NOV Inc. generates revenue primarily through two segments: Energy Products and Services, and Energy Equipment. In the third quarter of 2024, NOV reported total revenues of $2.19 billion, reflecting a slight increase from $2.185 billion in the same quarter of 2023.
| Segment | Q3 2024 Revenue (in millions) | Q3 2023 Revenue (in millions) | Change (%) |
|---|---|---|---|
| Energy Products and Services | $1,003 | $1,034 | -3% |
| Energy Equipment | $1,219 | $1,195 | 2% |
| Total Revenue | $2,191 | $2,185 | 0.3% |
Energy Products and Services
This segment generated revenues of $1,003 million in Q3 2024, a decrease of 3% compared to $1,034 million in Q3 2023. The operating profit for this segment was $114 million, down from $145 million in the prior year. The decline in revenue was attributed to lower drilling activity in North America, despite some offset from the acquisition of the artificial lift business.
Energy Equipment
In Q3 2024, the Energy Equipment segment reported revenues of $1,219 million, an increase of 2% from $1,195 million in Q3 2023. The operating profit for this segment improved to $129 million from $98 million in the previous year. This segment benefitted from increased demand for aftermarket parts and services, as well as a strong capital equipment backlog.
Backlog and Orders
As of September 30, 2024, NOV's backlog for capital equipment orders in the Energy Equipment segment was $4,478 million, reflecting a significant increase of $485 million year-over-year. The company booked new orders totaling $627 million during Q3 2024, which was an increase from $548 million in the prior year.
| Metrics | Q3 2024 | Q3 2023 |
|---|---|---|
| New Orders Booked (in millions) | $627 | $548 |
| Backlog (in millions) | $4,478 | $3,993 |
Profitability and Earnings
NOV's net income for Q3 2024 was $130 million, a 14% increase compared to $108 million in Q3 2023. The operating profit for the overall company was $194 million, compared to $183 million in the same quarter of the previous year. The adjusted EBITDA for the third quarter was $286 million, representing 13.1% of sales, a 7% increase year-over-year.
Cost Management and Corporate Expenses
Eliminations and corporate costs were $49 million for Q3 2024, down from $60 million in Q3 2023. This reduction was attributed to cost-saving initiatives and workforce reductions. Interest and financial costs were $21 million in Q3 2024, a slight decrease from $23 million in the same period of the previous year.
Market Conditions and Outlook
The oil and gas industry faces volatility due to geopolitical uncertainties and fluctuating commodity prices. As of October 11, 2024, the price for West Texas Intermediate Crude Oil was $75.56 per barrel. Despite challenges, NOV maintains a focus on operational efficiencies and innovative product development to strengthen its market position.
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Article updated on 8 Nov 2024
Resources:
- NOV Inc. (NOV) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of NOV Inc. (NOV)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View NOV Inc. (NOV)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.