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National Oilwell Varco Inc. (NYSE:NOV)

This company has been moved to the archive! The financial data has not been updated since August 3, 2016.

Common-Size Income Statement
Quarterly Data

National Oilwell Varco Inc., common-size consolidated income statement (quarterly data)

Microsoft Excel
3 months ended: Jun 30, 2016 Mar 31, 2016 Dec 31, 2015 Sep 30, 2015 Jun 30, 2015 Mar 31, 2015 Dec 31, 2014 Sep 30, 2014 Jun 30, 2014 Mar 31, 2014 Dec 31, 2013 Sep 30, 2013 Jun 30, 2013 Mar 31, 2013 Dec 31, 2012 Sep 30, 2012 Jun 30, 2012 Mar 31, 2012 Dec 31, 2011 Sep 30, 2011 Jun 30, 2011 Mar 31, 2011
Revenue 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Cost of revenue -97.97 -88.85 -86.81 -79.67 -78.13 -75.58 -73.10 -72.65 -72.31 -73.61 -75.75 -74.75 -77.40 -76.18 -75.46 -74.22 -72.41 -70.56 -70.06 -68.88 -69.17 -69.01
Gross profit 2.03% 11.15% 13.19% 20.33% 21.87% 24.42% 26.90% 27.35% 27.69% 26.39% 24.25% 25.25% 22.60% 23.82% 24.54% 25.78% 27.59% 29.44% 29.94% 31.12% 30.83% 30.99%
Selling, general and administrative -17.69 -19.78 -13.12 -11.58 -10.67 -12.59 -9.09 -9.67 -10.31 -10.04 -8.75 -8.91 -8.87 -9.67 -8.65 -8.89 -9.02 -9.06 -10.03 -10.48 -10.67 -11.63
Goodwill and intangible asset impairment 0.00 0.00 -60.03 -1.66 0.00 0.00 -1.82 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Operating profit (loss) -15.66% -8.63% -59.96% 7.08% 11.20% 11.83% 15.99% 17.68% 17.37% 16.34% 15.51% 16.34% 13.73% 14.15% 15.88% 16.88% 18.57% 20.38% 19.91% 20.64% 20.15% 19.36%
Interest and financial costs -1.74 -1.14 -0.99 -0.73 -0.67 -0.54 -0.46 -0.47 -0.51 -0.53 -0.44 -0.45 -0.54 -0.53 -0.37 -0.21 -0.19 -0.19 -0.21 -0.21 -0.26 -0.45
Interest income 0.17 0.23 0.18 0.06 0.05 0.10 0.09 0.07 0.10 0.08 0.06 0.03 0.05 0.06 0.04 0.04 0.06 0.07 0.12 0.13 0.11 0.13
Equity income (loss) in unconsolidated affiliates -0.41 -0.27 -0.11 0.00 0.18 0.19 0.28 0.16 0.44 0.20 0.26 0.22 0.27 0.36 0.26 0.13 0.40 0.40 0.28 0.29 0.28 0.41
Other income (expense), net -1.97 -0.96 -0.62 -0.60 -0.77 -1.16 -1.37 0.16 -0.40 0.00 -0.28 -0.28 0.23 -0.40 -0.49 -0.41 -0.11 -0.37 -0.31 0.00 -0.20 -0.60
Income (loss) from continuing operations before income taxes -19.61% -10.78% -61.50% 5.81% 10.00% 10.41% 14.54% 17.61% 16.99% 16.10% 15.12% 15.87% 13.75% 13.64% 15.32% 16.43% 18.74% 20.29% 19.79% 20.86% 20.10% 18.85%
Provision for income taxes 7.02 5.39 5.58 -1.09 -2.69 -3.92 -4.08 -5.07 -5.40 -4.89 -4.41 -4.89 -4.27 -4.22 -3.57 -4.98 -6.02 -6.25 -6.34 -6.74 -6.43 -6.01
Income (loss) from continuing operations -12.59% -5.39% -55.91% 4.72% 7.32% 6.49% 10.46% 12.55% 11.59% 11.21% 10.71% 10.99% 9.48% 9.42% 11.75% 11.45% 12.72% 14.04% 13.45% 14.12% 13.66% 12.84%
Income from discontinued operations 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.21 0.84 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Net income (loss) -12.59% -5.39% -55.91% 4.72% 7.32% 6.49% 10.46% 12.55% 11.80% 12.05% 10.71% 10.99% 9.48% 9.42% 11.75% 11.45% 12.72% 14.04% 13.45% 14.12% 13.66% 12.84%
Net (income) loss attributable to noncontrolling interests 0.00 -0.05 -0.04 -0.03 0.08 -0.06 -0.04 -0.04 -0.02 0.00 -0.05 0.00 0.00 0.04 0.00 0.06 0.06 0.05 0.02 0.11 0.03 0.10
Net income (loss) attributable to Company -12.59% -5.44% -55.95% 4.69% 7.39% 6.43% 10.42% 12.51% 11.78% 12.05% 10.66% 10.99% 9.48% 9.46% 11.75% 11.51% 12.78% 14.08% 13.48% 14.22% 13.69% 12.94%

Based on: 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31), 10-K (reporting date: 2011-12-31), 10-Q (reporting date: 2011-09-30), 10-Q (reporting date: 2011-06-30), 10-Q (reporting date: 2011-03-31).

The financial performance over the analyzed period is characterized by a transition from stable profitability to a severe contraction in margins, culminating in significant net losses by mid-2016. The common-size analysis reveals a progressive erosion of the company's ability to manage production costs and maintain operating efficiency relative to revenue.

Gross Profitability and Cost Management
A sustained deterioration in gross margin is observed. From March 2011 to December 2011, gross profit remained relatively stable around 30% to 31%. However, a downward trend emerged in 2012, with margins slipping to 24.54% by year-end. While a brief recovery occurred in 2014, reaching 27.69% in June, a sharp collapse followed. By June 2016, the cost of revenue escalated to 97.97% of total revenue, leaving a marginal gross profit of only 2.03%.
Operating Expense Trends
Selling, general, and administrative (SG&A) expenses remained largely contained between 8% and 12% of revenue from 2011 through 2014. A significant shift occurred starting in March 2015, where SG&A began to consume a larger portion of revenue, peaking at 19.78% in March 2016. This indicates that operating overhead grew disproportionately to revenue, compounding the pressure on operating margins.
Impact of Extraordinary Items
The most acute disruption in profitability occurred in December 2015, driven by a massive goodwill and intangible asset impairment totaling 60.03% of revenue. This single event shifted the operating profit from a positive 7.08% in the previous quarter to a loss of 59.96%. This impairment highlights a significant devaluation of acquired assets during the period.
Net Income and Bottom-Line Performance
Net income attributable to the company exhibited a steady decline from peaks of approximately 14% in 2011 to 4.69% by September 2015. Following the December 2015 impairment, the company recorded a net loss of 55.95% of revenue. Although the loss narrowed in early 2016, the company remained in a deficit, recording a net loss of 12.59% of revenue by June 30, 2016. This trend was partially mitigated by positive tax provisions in 2016, reflecting tax benefits resulting from operating losses.
Financial and Other Costs
Interest and financial costs showed a gradual increase as a percentage of revenue, rising from 0.45% in early 2011 to 1.74% by June 2016. While these costs remained small relative to the primary drivers of loss, the upward trajectory indicates an increasing debt service burden relative to the company's shrinking revenue base.

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