NOV (NOV) Q4 2023 earnings summary

Executive summary

• FY2023 revenue rose 18.6% YoY to $8.583B; operating profit increased to $651M from $264M, and net income attributable to shareholders reached $993M, including a $485M deferred-tax valuation-allowance release.

• Q4 revenue was $2.34B, up 7% QoQ and 13% YoY; net income was $598M, including the tax benefit, and Adjusted EBITDA was $294M excluding $55M of Other Items.

• Results benefited from higher global activity, international and offshore demand, improved manufacturing throughput, and progress on higher-margin project backlog; North American activity softened in some product markets.

Financial highlights

• FY2023 revenue was $8.583B versus $7.237B in 2022; operating profit was $651M versus $264M, and net income attributable to shareholders was $993M versus $155M.

• Q4 revenue of $2.34B increased $158M QoQ and $270M YoY; net income rose $484M QoQ to $598M and improved $494M YoY.

• Q4 Adjusted EBITDA was $294M, versus $267M in Q3 and $231M in Q4 2022, excluding Other Items of $55M, $7M, and $(8)M, respectively.

• FY2023 operating cash flow was $143M; capital expenditures were $283M, acquisitions net of cash acquired were $22M, and dividends paid were $79M.

Outlook and guidance

• Management views the oilfield market as early in an extended recovery, with energy-security needs and constrained production capacity expected to support activity despite near-term commodity-price and macro volatility.

• Expected 2024 revenue conversion from capital-equipment backlog: ~$1.393B for Completion & Production Solutions and ~$810M for Rig Technologies; timing remains subject to customer changes and supplier delays.

• Remaining performance obligations totaled $4.492B at year-end; ~$1.491B is expected to be recognized in 2024 and $3.001B in 2025 and thereafter.

• A two-segment reporting structure, Energy Equipment and Energy Products and Services, took effect January 1, 2024; reporting under the new structure starts in Q1 2024.