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Morningstar’s Analysis

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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

NOV Posts Solid Improvement in Q2 Results, Driven by Higher Industry Activity

Preston Caldwell Senior Analyst

Analyst Note

| Preston Caldwell |

NOV’s second-quarter results evinced solid improvement in the company's prospects, though not to the degree the headline numbers suggest. While revenue was up 13% sequentially, and adjusted operating margins jumped to 2% from negative 6% in the prior quarter, this was boosted by a temporary windfall from a settlement on a rig cancellation (which affected the rig technologies segment). Excluding the settlement contribution, revenue was up 8% sequentially, and adjusted operating margins improved to negative 2%. North America revenue surged 22% on the back of industrywide activity improvement, and international revenue was about flat. Our fair value estimate and no-moat rating are unchanged following the results.

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Company Profile

Business Description

NOV Inc is a leading supplier of oil and gas drilling rig equipment and products, such as downhole tools, drill pipe, and well casing. The company operates on a global scale, with more than a thousand locations in six continents.

Contact
7909 Parkwood Circle Drive
Houston, TX, 77036-6565
T +1 713 346-7500
Sector Energy
Industry Oil & Gas Equipment & Services
Most Recent Earnings Jun 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type Hard Assets
Employees 27,631

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