National-Oilwell Varco, Inc. (NOV) Shares Plummet After Missing Earnings Forecasts

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Shares of National-Oilwell Varco, Inc. (NYSE:NOV) are down big today after the company released their Fourth Quarter Earnings numbers. Net income for the quarter came in at $85 million, which equates to $0.23 per diluted share. This is a decrease over last quarter’s $0.61 per share. Additionally, EPS, excluding one-time items, was reported at just $0.40 per share, missing Wall Street’s expectations of $0.44 per share.

Revenue for the quarter was a slight disappointment as well. For the quarter National-Oilwell Varco, Inc. (NYSE:NOV) reported revenues of just $2.72 million, a significant fall from last year’s $5.71 million. This also fell short of the Street’s forecast of $3.04 million.

“Our team executed well in 2015 in a very tough market. Tumbling oil prices brought capital austerity and sharply lower oilfield activity, which is intensifying as we enter 2016,” Clay C. Williams, Chairman, President and CEO of National Oilwell Varco explained. “Nevertheless, our consolidated revenue outperformed the decline in global rig count, and our cost reductions and operational efficiencies enabled solid cash generation. Together with our strong balance sheet, this allowed us to invest in our business for future growth, as well as return significant capital to our shareholders. We are well positioned to take advantage of the opportunities we expect to emerge during 2016. This ‘lower-for-longer’ market decline will provide the foundation for an eventual recovery, as oil depletion marches onward and demand continues to grow. We nevertheless recognize that the timing of the recovery remains uncertain and that we face additional headwinds in the year ahead. I am grateful for the hard work and dedication of our NOV employees and am confident in their ability to navigate the tough road ahead. We remain resolute in our focus on reducing costs, improving execution, doing more with less and, ultimately, emerging from the depths of this cycle well positioned for the upturn.”

The stock is down 13.40% or $4.11 following the news, hitting $26.56 per share. Approximately 5.08M shares traded hands. NOV shares have declined 36.85% since June 29, 2015 and are currently downtrending. It has underperformed the S&P500 by 29.34%.

From a total of 18 analysts covering National Oilwell Varco (NYSE:NOV) stock, 4 rate it a “Buy”, 4 a “Sell”, and 10 a “Hold”. This means that 22% of the ratings are positive. The highest target price is $55 while the lowest target price is $23. The mean of all analyst targets is $37.26 which is 40.29% above today’s ($26.56) stock price. National Oilwell Varco was the topic of 33 analyst reports since July 31, 2015 according to the firm StockzIntelligence Inc. Oppenheimer initiated shares on January 12 with a “Perform” rating. Guggenheim upgraded NOV stock in a recent report from November 30 to a “Buy” rating. Finally, Vetr upgraded the stock to a “Strong-Buy” rating in a report they issued on a September 22.

The institutional sentiment increased to 0.76 in Q2 2015. It’s up 0.05, from 0.71 in 2015Q2. The ratio is positive, as 96 funds sold all their National-Oilwell Varco, Inc. shares they owned while 300 reduced their positions. 56 funds bought stakes while 243 increased their total positions. Institutions now own 322.34 million shares which is 6.75% less than the previous share count of 345.66 million in 2015Q2.

Mountain Lake Investment Management Llc holds 5.64% of its total portfolio in National-Oilwell Varco, Inc., equating to 186,000 shares. Academy Capital Management Inc Tx owns 575,999 shares representing 4.29% of their total US portfolio. Moreover, Vulcan Value Partners Llc has 4.16% of their total portfolio invested in the company, equating to 11.40 million shares. The Texas-based Energy Opportunities Capital Management Llc has a total of 4.14% of their portfolio invested in the stock. Wedgewood Partners Inc, a Missouri-based fund reported 7.08 million shares owned.

National Oilwell Varco, Inc. is engaged in providing design, manufacture and sale of equipment and components used in gas and oil drilling, completion and production operations. The company has a market cap of $10.41 billion. The Firm also provides oilfield services to the upstream gas and oil industry. It has 8.06 P/E ratio. The Firm operates through four divisions: Rig Systems, Rig Aftermarket, Wellbore Technologies, and Completion & Production Solutions.

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