National Oilwell Varco Inc (NOV) SEC Filing 10-Q Quarterly report for the period ending Sunday, September 30, 2018

FOR IMMEDIATE RELEASE

NATIONAL OILWELL VARCO Reports Third quarter 2018 EARNINGS

HOUSTON, TX, October 25, 2018

“Our revenues and Adjusted EBITDA continued to grow in the third quarter, underpinned by higher sequential demand for downhole tools, drill pipe, and wellsite services in support of drilling operations globally,” commented Clay Williams, Chairman, President, and CEO. “However, the slowdown in North American completions activity late in the period led to lower sequential well-stimulation equipment sales. This together with weaker demand for offshore equipment offset some of our sequential revenue gains.

We believe the industry is poised to achieve higher levels of activity in 2019 as it works through near-term logistical challenges in North American unconventional basins, navigates end-of-year budget constraints, and sanctions more offshore projects. During the third quarter we saw rising demand for conductor pipe connections—a leading indicator of future offshore wells—as well as increased inquiries around offshore rig reactivations, pointing to more offshore activity ahead. We also see pockets of demand strengthening in certain international land markets, as operators respond to generally higher commodity prices. In the meantime, we continue to develop and deliver technology that helps lower the industry’s marginal production costs, and position our business as a leading innovator and provider of critical well construction tools. National Oilwell Varco is well-positioned to capitalize on the opportunities that lie ahead.”  

Wellbore Technologies

Wellbore Technologies generated revenues of $847 million in the third quarter of 2018, an increase of seven percent from the second quarter of 2018 and an increase of 22 percent from the third quarter of 2017. The segment realized meaningful growth for the second consecutive quarter as domestic revenue outpaced the percentage growth in the U.S. rig count, and international operations capitalized on an increasing number of opportunities associated with the emerging recovery in the Eastern Hemisphere. Operating leverage was limited to four percent mostly due to higher steel and labor costs, which outpaced the segment’s price increases. Operating profit was $40 million, or 4.7 percent of sales. Adjusted EBITDA increased two percent sequentially and 44 percent from the prior year to $135 million, or 15.9 percent of sales.

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