NOV Inc., a major player in the energy sector, announced its third-quarter financial results on Thursday, painting a mixed picture for investors. While the company fell short of analysts’ expectations in terms of sales, it showcased progress in profitability and margins.
NOV reported quarterly revenue of $2.19 billion, missing the analyst consensus estimate of $2.23 billion. The company’s quarterly earnings per share reached 33 cents, also falling short of the anticipated 36 cents. However, the company highlighted positive developments in other key areas.
“During the third quarter of 2024, NOV continued to improve cash flow, backlog, profitability and margins compared to the prior year,” stated Clay Williams, Chairman, President, and CEO. He emphasized the company’s strong execution, increasing demand for aftermarket parts and services, and improved business efficiency as key drivers behind the improved margins. Williams also pointed to growing demand for capital equipment, particularly for long-cycle offshore and international projects. NOV achieved a book-to-bill ratio of 111% during the quarter, indicating strong order activity.
Looking ahead, NOV anticipates a slight decline in consolidated revenues for the fourth quarter, projecting a 3% to 5% year-over-year decrease. The company expects adjusted EBITDA to fall between $280 million and $300 million.
Despite the mixed earnings report, NOV shares gained 0.4% on Monday, closing at $15.78. Several analysts adjusted their price targets for NOV stock following the earnings announcement. Stifel analyst Stephen Gengaro maintained his Buy rating on NOV but lowered the price target from $25 to $24. Similarly, Susquehanna analyst Charles Minervino kept his Positive rating but reduced the price target from $22 to $21.
Overall, while NOV’s third-quarter earnings fell short of expectations, the company demonstrated progress in profitability and margins, coupled with strong order activity. Analysts remain optimistic about the company’s future prospects, with some adjustments in price targets reflecting the near-term outlook.
