Analyst Note| Preston Caldwell |
NOV's first quarter revenue declined 6% sequentially, driven mainly by a 20% drop in the completion and production, or C&P, segment. By geography, revenue increased 10% in North America due to higher industrywide activity, but dropped 12% in international markets. Adjusted operating margins dipped to negative 6.3% from negative 4.9% previously, representing decrementals of 18%, a somewhat mild bottom-line deterioration reflecting the contribution from cost-cutting. Our fair value estimate and no-moat rating are unchanged following the results.