Key Projects In Q3 And Innovations: In Q3 2023, NOV (NOV) introduced its ATOM RTX Robotic System on a drillship in Brazil. It secured multiple project awards for fiberglass products that enhance corrosion resistance in Petrobras FPSO projects. It will also provide a range of reinforced thermoplastic pipes for Petroleum Project Oman. During Q3, the company completed eighteen reactivation and certification projects in the Middle East, the North Sea, and the Gulf of Mexico. Plus, it received an order for 25,000-horsepower of Ideal eFrac stimulation equipment. Its recent technological innovations include the PowerShift motor and Tolteq Switch unmanned measurement-while-drilling (MWD) configuration. In renewables, it deployed its connection technology, XCalibur, for a geothermal project in California.
In the coming quarters, NOV’s management expects higher demand and lower cost structure to drive profitability and improve cash flows for NOV. NOV will be consolidating its three segments into two segments: Energy Equipment and Energy Products and Services.
Revenue And Operating Income Across Segments: The Rig Technologies segment saw the steepest quarter-over-quarter rise (13% up), while the Wellbore Technologies segment saw a marginal decline (1% down). Rig Technologies also witnessed the sharpest operating income rise (34% up) from Q2 to Q3. Increased spare part shipments in its aftermarket operations resulted in a revenue hike. However, new capital equipment orders decreased by 28% in Q3.
Cash Flow Remained In The Negative Territory: NOV’s cash flow from operations remained negative but improved in 9M 2023 compared to a year ago. As a result, FCF remained negative. Debt-to-equity (0.31x) declined marginally from a quarter ago. You may read more about the company in our previous article here.
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.
