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HOUSTON - NOV Inc. (NYSE:NOV) reported second quarter earnings that showed declining profit margins amid market headwinds, despite revenue slightly exceeding analyst expectations.
The energy equipment provider’s shares fell 4.94% in pre-market trading after the results.
The company reported second quarter revenue of $2.19 billion, slightly above the consensus estimate of $2.14 billion but down 1% YoY. Adjusted earnings per share came in at $0.29, matching analyst expectations. Net income fell sharply by 52% to $108 million compared to the same period last year, though the decline was primarily due to a $130 million pre-tax gain from a business sale in Q2 2024.
Adjusted EBITDA decreased 10% YoY to $252 million, representing 11.5% of sales, as the company faced challenges from macroeconomic uncertainty, OPEC+ production quota changes, and Middle East conflicts that led to customer caution and deferred orders.
"Macroeconomic uncertainty, the rapid unwinding of OPEC+ production quotas, and conflict in the Middle East led to greater caution among our customers, deferred orders, and lower year-over-year revenues," said Clay Williams, Chairman and CEO. "These market headwinds and a shift in sales mix pressured margins during the quarter."
The company’s Energy Products and Services segment saw a 2% revenue decline to $1.03 billion, while Energy Equipment revenue remained flat at $1.21 billion compared to the previous year. New orders totaled $420 million, down significantly from $977 million in Q2 2024.
NOV returned $176 million to shareholders through share repurchases and dividends during the quarter. The company maintained a strong balance sheet with $1.08 billion in cash and $1.73 billion in total debt.
Looking ahead, NOV expects year-over-year consolidated revenues to decline between 1-3% in the third quarter, with Adjusted EBITDA projected between $230-250 million. Management anticipates current market challenges to persist through the second half of 2025, with offshore activity expected to resume growth in 2026.
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