NOV shares tumble 5% as profit margins decline amid market headwinds

Published 29/07/2025, 10:54
 NOV shares tumble 5% as profit margins decline amid market headwinds

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.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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