NOV Earnings: International Business Remains Resilient Despite North American Headwinds

NOV reported third-quarter results below PitchBook consensus, with earnings per share at $0.33 versus a $0.35 median expectation. Solid demand for offshore production-related equipment continued to drive strong orders for energy equipment, but overall consolidated revenue for offshore declined 2% year over year. The energy products and services segment’s offshore revenue fell due to lower drill pipe shipments and conductor pipe connection sales. NOV’s consolidated EBITDA improved 7% year over year to $286 million, with EBITDA margin increasing 90 basis points to 13.1%. Management continues to focus on contracts wins and projects that meet its return and margin expectations. Even so, we believe that margin outperformance is temporary and expect NOV will give up most of these gains. We don’t expect to materially change our $22 fair value estimate.