Key Projects And Technologies In Q1: NOV (NOV) expects rising oilfield demand for its products and technologies and better working capital to improve cash flow from operations in Q2 2024. It won several awards in Q1, including a new energy contract that provides a deoxygenation and dehydration package for a green hydrogen project in Australia. It secured a three-year contract  In the Middle East to supply reinforced thermoplastic pipe. In the US, NOV secured two significant contracts for spoolable pipe. Its other contracts include an inter-array cable-lay system in Japan, the deployment of the first ATOM RTX land robotics solution in Canada, the delivery of its first actively heated flexible pipe system in the Black Sea, and a subsea equipment upgrade for an ultra-deepwater drillship.

In downhole technologies, a major order of completion and workover risers in Brazil. It secured an order for high-viscosity Kenics heat exchangers while it received several contracts to provide solids control technologies and services to increase drilling efficiency and reduce costs. Also, during the quarter, it gained traction in thermoplastic polymer applications in Asia.

Revenue And Operating Income: The Energy Equipment segment witnessed 12% year-over-year revenue growth, while the Energy Products and Services segment revenue increased by 8%. The Energy Equipment segment saw operating income rise (34% up) from Q1 2023 to Q1 2024. Capital equipment backlog execution and higher demand for aftermarket products and services led to the Energy Equipment segment’s outperformance. Increased demand from international and offshore markets and market share gains in North America prompted the margin enhancement in Energy Products and Services. New capital equipment orders increased by 3% in Q1.

Cash Flows Still Negative But Dividends To Increase: NOV’s cash flow from operations remained negative in Q1 2024 but improved compared to a year ago. Although FCF remained negative, it improved. Debt-to-equity (0.29x) deteriorated slightly since December 31, 2023. Recently, the company was authorized to repurchase up to $1 billion of shares over the next three years. The company also expects to increase its dividend by 50% beginning in June 2024.

Thanks for reading the NOV Take Three, designed to give you three critical takeaways from NOV’s earnings report.  Soon, we will present a second update on NOV earnings highlighting its current strategy, news, and notes we extracted from our deeper dive.