Jul. 30–Houston oilfield service company National Oilwell Varco reported a multibillion loss during the second quarter amid what executives are calling a “generational oilfield downturn.”
NOV reported a nearly $5.39 billion loss on $2.13 billion of revenue during the second quarter. The figures translated into a $14.11 loss per share.
The second quarter earnings were mixed compared to the $24 million profit on $2.1 billion of revenue.
Although NOV beat Wall Street expectations of $2.09 billion of revenue, the company fell far below the expected loss per share of 6 cents.
National Oilwell Varco CEO Clay Williams described the second quarter results as part of a generational oilfield downturn. The company evaluated the carrying value of its long-lived assets amid market indicators hitting new decade-lows. Based on the evaluation, the company recorded a charge of $5.37 billion to write down goodwill, intangible assets and fixed assets — on top of $399 million in restructuring charges and $11 million in other costs.
“Though we are well-positioned to support growth in the offshore and international markets as customers increase activity after years of curtailed spending, severe capital austerity and lower activity in North America are resulting in a rapid change in our business mix,” Williams said in a statement. “This presents NOV with both opportunities and challenges.”
Williams is expected to speak about restructuring and layoffs during an earnings call scheduled for Tuesday morning. The company holds $2.48 billion of debt but has $3 billion of credit and another $1.13 billion of cash.
With historical roots going back to 1862, NOV is headquartered in Houston and has more than 35,000 employees in 65 nations.
NOV reported a $31 million loss on $8.5 billion of revenue in 2018. The company has not made an annual profit since 2014.
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