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NOV to Report Q3 Earnings: Is the Stage Set for Another Beat?
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NOV Inc. (NOV - Free Report) is set to release third-quarter results on Oct 27. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of 15 cents per share on revenues of $1.8 billion.
Let’s delve into the factors that might have influenced the oilfield service provider’s performance in the September quarter. But it’s worth taking a look at NOV’s previous-quarter results first.
Highlights of Q2 Earnings & Surprise History
In the last reported quarter, the Houston, TX-based oil and gas equipment company comfortably eclipsed the consensus mark due to better-than-expected performances by each of its three segments. NOV had reported adjusted earnings per share of 18 cents, well above the Zacks Consensus Estimate of 5 cents. Revenues of $1.7 billion had also come in 5.9% above the consensus mark.
Despite missing the Zacks Consensus Estimate for earnings in three of the last four quarters, NOV has a trailing four-quarter earnings surprise of roughly 1.5%, on average. This is depicted in the graph below:
The Zacks Consensus Estimate for the third-quarter bottom line has remained the same in the last seven days. The estimated figure indicates a 236.4% jump year over year. The Zacks Consensus Estimate for revenues, meanwhile, suggests a 35.2% increase from the year-ago period.
Factors to Consider
In the second quarter of 2022, the company’s Rig Technologies segment generated revenues of $462 million, up 5% sequentially. The positive momentum is most likely to have continued in the third quarter, thanks to impressive sales of offshore wind turbine installation vessel packages and growing demand for its aftermarket operations. Considering the improved operating environment, the Zacks Consensus Estimate for the third-quarter revenues of Rig Technologies is pegged at $491 million, indicating an increase of 6.3% from the June quarter.
NOV is also expected to have benefited from a powerful performance from its Wellbore Technologies unit. The company’s second-quarter segment revenues increased to $666 million from $608 million in the previous three-month period. With more drilling work, improved pricing and better execution, the favorable revenue story is likely to have continued in the to-be-reported quarter. As a reflection of this, the consensus mark for third-quarter Wellbore Technologies revenues stands at $694 million, suggesting a rise of 4.2% from the quarter ago.
On a somewhat bearish note, NOV’s total cost of goods sold in the April-June rose 6.3% quarter over quarter to $1.4 billion. The upward cost trajectory is likely to have continued in the third quarter due to inflationary pressures.
What Does Our Model Say?
The proven Zacks model does not conclusively show that NOV is likely to beat estimates in the third quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates. But that’s not the case here.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, for this company is -4.85%.
Zacks Rank: NOV currently carries a Zacks Rank #2.
Stocks to Consider
While an earnings beat looks uncertain for NOV, here are some firms from the energy space that you may want to consider on the basis of our model:
Murphy USA (MUSA - Free Report) has an Earnings ESP of +12.68% and a Zacks Rank #1. The firm is scheduled to release earnings on Oct 26.
For 2022, Murphy USA has a projected earnings growth rate of 69.6%. Valued at around $6.6 billion, MUSA has gained 60.6% in a year.
PBF Energy (PBF - Free Report) has an Earnings ESP of +10.30% and a Zacks Rank #2. The firm is scheduled to release earnings on Oct 27.
PBF topped the Zacks Consensus Estimate by an average of 78% in the trailing four quarters, including a 43.8% beat in Q2. PBF has gained 171.6% in a year.
Oceaneering International (OII - Free Report) has an Earnings ESP of +50% and a Zacks Rank #2. The firm is scheduled to release earnings on Oct 26.
The Zacks Consensus Estimate for OII’s 2022 earnings has been revised 33.3% upward over the past 60 days. Valued at around $1 billion, Oceaneering International has lost 34.8% in a year.
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NOV to Report Q3 Earnings: Is the Stage Set for Another Beat?
NOV Inc. (NOV - Free Report) is set to release third-quarter results on Oct 27. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of 15 cents per share on revenues of $1.8 billion.
Let’s delve into the factors that might have influenced the oilfield service provider’s performance in the September quarter. But it’s worth taking a look at NOV’s previous-quarter results first.
Highlights of Q2 Earnings & Surprise History
In the last reported quarter, the Houston, TX-based oil and gas equipment company comfortably eclipsed the consensus mark due to better-than-expected performances by each of its three segments. NOV had reported adjusted earnings per share of 18 cents, well above the Zacks Consensus Estimate of 5 cents. Revenues of $1.7 billion had also come in 5.9% above the consensus mark.
Despite missing the Zacks Consensus Estimate for earnings in three of the last four quarters, NOV has a trailing four-quarter earnings surprise of roughly 1.5%, on average. This is depicted in the graph below:
NOV Inc. Price and EPS Surprise
NOV Inc. price-eps-surprise | NOV Inc. Quote
Trend in Estimate Revision
The Zacks Consensus Estimate for the third-quarter bottom line has remained the same in the last seven days. The estimated figure indicates a 236.4% jump year over year. The Zacks Consensus Estimate for revenues, meanwhile, suggests a 35.2% increase from the year-ago period.
Factors to Consider
In the second quarter of 2022, the company’s Rig Technologies segment generated revenues of $462 million, up 5% sequentially. The positive momentum is most likely to have continued in the third quarter, thanks to impressive sales of offshore wind turbine installation vessel packages and growing demand for its aftermarket operations. Considering the improved operating environment, the Zacks Consensus Estimate for the third-quarter revenues of Rig Technologies is pegged at $491 million, indicating an increase of 6.3% from the June quarter.
NOV is also expected to have benefited from a powerful performance from its Wellbore Technologies unit. The company’s second-quarter segment revenues increased to $666 million from $608 million in the previous three-month period. With more drilling work, improved pricing and better execution, the favorable revenue story is likely to have continued in the to-be-reported quarter. As a reflection of this, the consensus mark for third-quarter Wellbore Technologies revenues stands at $694 million, suggesting a rise of 4.2% from the quarter ago.
On a somewhat bearish note, NOV’s total cost of goods sold in the April-June rose 6.3% quarter over quarter to $1.4 billion. The upward cost trajectory is likely to have continued in the third quarter due to inflationary pressures.
What Does Our Model Say?
The proven Zacks model does not conclusively show that NOV is likely to beat estimates in the third quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates. But that’s not the case here.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, for this company is -4.85%.
Zacks Rank: NOV currently carries a Zacks Rank #2.
Stocks to Consider
While an earnings beat looks uncertain for NOV, here are some firms from the energy space that you may want to consider on the basis of our model:
Murphy USA (MUSA - Free Report) has an Earnings ESP of +12.68% and a Zacks Rank #1. The firm is scheduled to release earnings on Oct 26.
You can see the complete list of today’s Zacks #1 Rank stocks here.
For 2022, Murphy USA has a projected earnings growth rate of 69.6%. Valued at around $6.6 billion, MUSA has gained 60.6% in a year.
PBF Energy (PBF - Free Report) has an Earnings ESP of +10.30% and a Zacks Rank #2. The firm is scheduled to release earnings on Oct 27.
PBF topped the Zacks Consensus Estimate by an average of 78% in the trailing four quarters, including a 43.8% beat in Q2. PBF has gained 171.6% in a year.
Oceaneering International (OII - Free Report) has an Earnings ESP of +50% and a Zacks Rank #2. The firm is scheduled to release earnings on Oct 26.
The Zacks Consensus Estimate for OII’s 2022 earnings has been revised 33.3% upward over the past 60 days. Valued at around $1 billion, Oceaneering International has lost 34.8% in a year.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.