NOV beats revenue forecast as impairments drive loss
Oilfield equipment maker posts $2.28B quarterly revenue, shares climb despite one-time charges
NOV Inc. shares rose more than 3% on Wednesday after the oilfield equipment manufacturer reported stronger-than-expected fourth-quarter revenue, though one-time impairments pushed the company to a net loss.
The Houston-based company generated revenue of $2.28 billion for the quarter ending December 31, 2025, exceeding analyst estimates of $2.14 billion and representing a 6.5% beat. However, the company reported a loss per share of $0.21, missing consensus projections of $0.25 profit due to $86 million in impairment charges and an elevated tax rate.
The stock's advance pushed shares to $19.38, edging past the previous 52-week high of $19.22 reached earlier in the week. The rally came despite the headline loss, as investors appeared to focus on the company's strong free cash flow generation and the non-recurring nature of the impairments.
NOV generated free cash flow of $472 million in the fourth quarter, bringing full-year free cash flow to $876 million. The solid cash performance came during a challenging period for the oilfield services sector, which has faced pressure from volatile energy prices and cautious capital spending by exploration and production companies.
Looking ahead, management provided guidance for the first quarter of 2026, forecasting a revenue decline of 1% to 3% year-over-year with adjusted EBITDA expected in the range of $200 million to $225 million. The outlook reflects ongoing uncertainty in the energy sector, though company executives indicated they anticipate EBITDA for the full year 2026 will be "in-line to slightly lower" than the prior year, with conditions expected to improve in 2027.
The fourth-quarter revenue beat represents a notable turnaround for NOV, which had seen quarterly revenue decline 0.7% year-over-year as of the most recent period. The company's ability to exceed analyst expectations suggests operational resilience despite broader industry headwinds, including the transition to renewable energy and fluctuating oil demand.
Analysts remain cautious on the stock, with a consensus target price of $17.95 slightly below current trading levels. Of 21 analysts covering the company, 9 rate it a buy or strong buy, while 10 recommend hold positions, according to market data.
NOV, formerly known as National Oilwell Varco, provides equipment and components for the oil and gas industry, focusing on upstream operations. The company's performance is closely watched as a barometer for capital spending trends in the energy sector, particularly for drilling and completion activities.
The impairment charges that contributed to the quarterly loss highlight the challenges still facing oilfield services companies as they navigate a complex transition period for global energy markets. However, the strong free cash flow generation and revenue beat suggest NOV is managing to maintain operational discipline while positioning for potential recovery in 2027.