Breaking News
0

National Oilwell (NOV) Shares Decline 8% On Drab Q1 Outlook

By Zacks Investment ResearchApr 14, 2019 10:51PM ET
www.investing.com/analysis/national-oilwell-nov-shares-decline-8-on-drab-q1-outlook-200406896
National Oilwell (NOV) Shares Decline 8% On Drab Q1 Outlook
By Zacks Investment Research   |  Apr 14, 2019 10:51PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

National Oilwell Varco, Inc.’s (NYSE:NOV) shares dipped more than 8% to close at $26.87 on Apr 12, after the company’s Chairman Clay Williams (NYSE:WMB) stated that the energy equipment supplier’s first-quarter 2019 results are likely to be impacted by certain headwinds. The firm expects revenues to come in below prior expectation of $2.08-$2.1 billion. National Oilwell now anticipates first-quarter 2019 sales to come in at $1.94 billion, reflecting a sequential fall of 26%. Further, it expects to post a GAAP operating loss of around $48 million. Adjusted EBITDA is likely to total $140 million, down from $160 million and $279 million recorded in first-quarter 2018 and the last reported quarter, respectively.

Notably, during National Oilwell’s fourth-quarter call, management had already notified investors that the oil crash during the final months of 2018 would likely take a toll on the firm’s near-term results. In fact, the company did predict a sequential fall in revenues from all the three segments—Rig Technologies, Wellbore Technologies and Completion & Production— in first-quarter 2019. However, the impact of weak oil prices has been much greater than expected.

What’s the Crux of the Matter?

The oil crash toward the end of 2018 caught the energy companies off guard, especially the oilfield services players. After touching multi-year highs of $76.40 a barrel in early October 2018, prices slid below $45 in late December amid oversupply concerns and weakening demand. Weaker demand for oilfield equipment due to low prices persisted in the first quarter of 2019 as well. Amid the growing crisis, many exploration and production companies slashed capital spending for 2019, further hurting the performance of oilfield equipment providers like National Oilwell.

Contraction of orders, fewer deliveries of drill pipes and other equipment, and slowdown of activities in both the offshore and North American markets will impact the company’s first-quarter results. As such, the firm will likely come up with lower-than-expected results from each of its three segments amid tough operating environment.

What Lies Ahead?

Indeed, the year 2019 witnessed a rebound in oil prices, with crude popping up to $60.55 a barrel in March-end, posting the biggest first-quarter gain in a decade. WTI has been currently trading over $63 a barrel, underpinned mainly by OPEC+ supply cuts, and U.S. sanctions against Venezuela and Iran.

The improving energy landscape is gradually leading to ramped-up activities in the United States along with steady increase in new order bookings. Nonetheless, pipeline concerns and curtailed capex for 2019 by energy producers will definitely keep a tab on upstream activities. With infrastructural log jams likely to take another year to get in place, short-term prospects for National Oilwell seem a little challenging. Further, while things have gradually started looking up for international and offshore market, recovery is still not around the corner.

While National Oilwell believes that improving commodity prices will aid the firm’s results and backlogs as it progresses through 2019, it still maintains a bleak outlook for the current year. The company is presently focusing on adapting to the current market scenario. Initiatives like expansion or addition of new market offerings, adoption of superior technologies, innovation of business processes, and integration of value chain offerings, acquisitions and profitable collaborations, among other strategic strides, will enable the firm to perform well in the current market scenario.

Zacks Rank and Key Picks

National Oilwell currently carries a Zacks Rank #3 (Hold).

Investors interested in the same industry can consider Dril-Quip, Inc. (NYSE:DRQ) , Superior Energy Services, Inc. (NYSE:SPN) and USA Compression Partners, LP (NYSE:USAC) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Biggest Tech Breakthrough in a Generation

Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.

A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft (NASDAQ:MSFT) in the 1990s. Zacks’ just-released special report reveals 7 stocks to watch. The report is only available for a limited time.

See 7 breakthrough stocks now>>



National Oilwell Varco, Inc. (NOV): Free Stock Analysis Report

Dril-Quip, Inc. (DRQ): Free Stock Analysis Report

Superior Energy Services, Inc. (SPN): Free Stock Analysis Report

USA Compression Partners, LP (USAC): Free Stock Analysis Report

Original post

Zacks Investment Research
National Oilwell (NOV) Shares Decline 8% On Drab Q1 Outlook
 
National Oilwell (NOV) Shares Decline 8% On Drab Q1 Outlook

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email