Shares of Texas-based National Oilwell Varco, Inc. (NOV) dropped 4.3% in extended trade on Tuesday after the company posted weak third-quarter 2021 financial results. NOV provides components and equipment for the upstream oil and gas industry.
The company reported a loss of $0.18 per share, higher than the Street’s loss estimate of $0.09 per share and the loss of $0.14 per share reported last year.
Revenues declined 3% year-over-year to $1.34 billion and fell short of analysts’ expectations of $1.42 billion.
Meanwhile, Wellbore Technologies segment’s revenues grew 40% year-over-year to $507 million on improved oil and gas drilling activity levels.
However, revenues generated by Completion & Production Solutions segment fell 20% year-over-year to $478 million due to supply chain issues and COVID-19 operational disruptions.
Similarly, revenues from Rig Technologies segment decreased 13% year-over-year to $390 million. (See Insiders’ Hot Stocks on TipRanks)
The Chairman, President and CEO of NOV, Clay Williams, said, “While pandemic-related supply chain issues challenged certain projects, we nevertheless saw sequential improvement in many of our oilfield businesses, along with our strong order levels. Rising economic activity and higher backlogs continue to underpin our improving outlook for 2022.”
On October 12, Morgan Stanley (MS) analyst Connor Lynagh maintained a Hold rating on the stock with a price target of $17 (16.4% upside potential).
The analyst expects the company to report a loss of $0.07 per share in the fourth quarter.
Overall, the stock has a Hold consensus rating based on 1 Buy, 3 Holds and 1 Sell. The average National Oilwell Varco price target of $15.20 implies 4.1% upside potential. Shares have gained nearly 170% over the past year.
According to TipRanks’ Smart Score rating system, NOV scores an 8 out of 10, suggesting that the stock is likely to outperform market averages.
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