National Oilwell Varco, Inc., the Houston, Texas company with operations throughout Oklahoma reported second quarter 2019 revenues of $2.13 billion, an increase of 10 percent compared to the first quarter of 2019 and an increase of one percent from the second quarter of 2018.
Net loss for the second quarter of 2019 was $5.39 billion, which included non-cash, pre-tax charges of $5.77 billion. Adjusted EBITDA (operating profit excluding depreciation, amortization, and other items) increased $55 million sequentially to $195 million, or 9.1 percent of sales.
“NOV continues to face challenging cross-currents as it navigates a generational oilfield downturn. International and offshore markets are exhibiting growth, while North America land markets are declining as customers slash spending. Nevertheless, consolidated results improved sequentially in each of our three business segments, as we pivot to higher-growth areas,” commented Clay Williams, Chairman, President, and CEO. “We were pleased to see demand for NOV’s technology and equipment from international and offshore customers drive our third consecutive quarter of rising bookings for capital equipment.”
“The increased emphasis on capital discipline from our customer base is driving them to do more with less, and it has become clear in the second quarter that this approach is not going away anytime soon,” added Williams. “Recognition of this challenging market dynamic, as well as lower equity values and diminished availability of capital for the energy sector led to the Company’s significant impairment charge this quarter. In this environment NOV is focused on cutting our cost structure and managing working capital to improve cash flow and return on capital, while we continue to address our customers’ most challenging needs with the critical technology and equipment that NOV provides.”
Wellbore Technologies generated revenues of $850 million in the second quarter of 2019, an increase of five percent from the first quarter of 2019 and an increase of seven percent from the second quarter of 2018. Improving international market conditions drove a 14 percent sequential improvement in markets outside North America, while U.S. revenues increased two percent amid declining drilling activity levels. Operating loss was $3.30 billion and included $3.35 billion of other items. Adjusted EBITDA increased 15 percent sequentially to $134 million, or 15.8 percent of sales. Higher volumes and cost savings initiatives resulted in 40 percent Adjusted EBITDA incrementals (the change in Adjusted EBITDA divided by the change in revenue).
Completion & Production Solutions generated revenues of $663 million in the second quarter of 2019, an increase of 14 percent from the first quarter of 2019 and a decrease of 10 percent from the second quarter of 2018. Most of the segment’s business units posted sequential revenue increases on rising demand from international and offshore markets for completion and production-related equipment. Operating loss was $1.93 billion and included $1.94 billion in other items. Adjusted EBITDA increased 86 percent sequentially to $52 million, or 7.8 percent of sales.