NOV expands margins as adjusted EBITDA reaches $283 million
The energy equipment provider reported a consolidated adjusted EBITDA margin of 13.3% for the second quarter.
NOV (NOV), the energy equipment provider, reported second-quarter consolidated revenues of $2.13 billion.
The quarter was marked by a significant expansion in profitability despite a slight year-over-year decline in top-line growth. The company saw its adjusted EBITDA margin rise to 13.3%.
Consolidated revenues rose 4% sequentially from $2.05 billion in the first quarter, though they were 2% lower than the $2.17 billion reported in the second quarter of the previous year. Adjusted EBITDA rose to $283 million, an increase of $106 million from the first quarter and $31 million from the prior year. This result included a non-recurring benefit of approximately $40 million related to tariff refunds, with $14 million attributed to Energy Equipment and $26 million to Energy Products and Services.
Performance diverged across the company's primary segments. Energy Equipment revenue increased 1% year-over-year to $1.22 billion, and its adjusted EBITDA grew by $42 million to $200 million. Conversely, Energy Products and Services revenue decreased 5% year-over-year to $974 million, while its adjusted EBITDA fell $2 million to $144 million.
The Energy Equipment capital equipment backlog decreased to $4.08 billion as of June 30, 2024, down $220 million from the same date in 2023 and lower than the $4.23 billion reported on March 31, 2024. The book-to-bill ratio for the segment was 74%, an improvement over 66% in the prior year's second quarter, but a decrease from 80% in the first quarter of 2024.
For the third quarter of 2024, the company expects consolidated revenues to be flat to up 2% year-over-year. It projects adjusted EBITDA for the period to be between $240 million and $270 million.
NOV returned $127 million to shareholders during the quarter through $63 million in share repurchases and $64 million in dividends, up from $100 million returned in the first quarter. The company also announced the acquisition of Rigsmart and Cranesmart to expand its digital portfolio.