Key Projects And Technologies: During Q2, NOV (NOV) agreed to deploy its Downhole Broadband Solutions (DBS) wired drill pipe technology and services. It received an order to produce 300 wind towers. The company was awarded a significant project related to the safe disposal of cleaned and treated drill cuttings at the drilling site. During the quarter, it introduced the i-Opener TD-II toe initiation sleeve into North America and deployed a bottom-hole assembly solution. It won an order to supply Bondstrand glass-reinforced epoxy piping for a Malaysian Carbon Capture and Sequestration (CCS) platform. It secured a multi-year contract to supply large-diameter casing for an operator in Azerbaijan. Also, during the quarter, it introduced PosiTrack torsional vibration mitigation tool and deployed Seismos Acoustic Friction Analysis globally in a joint venture.
Revenue And Operating Income In Q2: In Q2 2024, the Energy Equipment segment witnessed 8% year-over-year revenue growth, while the Energy Products and Services segment revenue increased by 2%. The Energy Equipment segment saw operating income rise tremendously (1.8x up) from Q2 2023 to Q2 2024. Operating profit in the Energy Products and Services segment, on the other hand, decreased.
The Energy Equipment segment outperformed due to higher demand for aftermarket products and services, a higher backlog, and cost-reduction initiatives. New capital equipment orders increased by 12% in Q2. In the Energy Products and Services segment, strong demand in international and offshore markets partially offset declining North American activity in Q2.
Cash Flows Turned Positive As Dividends Increased: NOV’s cash flow from operations turned significantly positive in 1H 2024, following a negative cash flow a year earlier. FCF also turned positive in the past year. Debt-to-equity (0.27x) has remained unchanged since December 31, 2023. The company has recently increased its dividend by 50% and expects to return at least 50% of the excess FCF to shareholders.
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.
