National Oilwell (NOV) Reconstitutes Reporting Segments

National Oilwell Varco, Inc. (NYSE:NOV) recently restructured its business segments by combining two of its offshore-levered segments into a single unit. The company combined Rig Systems and Rig Aftermarkets into a single unit named Rig Technologies during fourth-quarter 2017. The strategic move is likely to enable National Oilwell to reduce the administration burden and better align the company with the evolving market conditions.

While Rig Systems was engaged in the design and manufacturing of integrated drilling systems and components for land and offshore drilling rigs, Rig Aftermarket was involved in the delivery of consumables, spares and other necessary services to maintain the usefulness of the assets. Notably, both these segments witnessed weaker year-over-year income in the last quarter amid lower activities and order cancellations.

The company which is expected to release fourth-quarter 2017 numbers on Feb 5, forecasts its offshore dependent unit Rig Technologies to deliver better-than-expected results in the quarter. However, management remains concerned about its Completion and Production Solutions arm whose results are expected to be below the prior guidance.

Deferred deliveries of a new product in its Subsea Flexible Pipe business along with engineering challenges and scarcity of orders in its Process and Flow Technologies unit is likely to hurt the results of the segment. Meanwhile, National Oilwell expects results from its onshore focused Wellbore Technologies to be in line with expectations.

Further, the company also anticipates to incur $120-$140 million pre-tax restructuring charges. This would include expenses for facility closures, severance and inventory write-downs, as well as other charges in the quarter under review.

National Oilwell carries a Zacks Rank #3 (Hold).

Investors interested in the energy space may consider a few better-ranked energy players like ConocoPhillips (NYSE:COP) , Royal Dutch Shell (LON:RDSa) plc RDS.A and Statoil (OL:STL) ASA (NYSE:STO) . All three companies sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

ConocoPhillips delivered an average positive earnings surprise of 152.34% in the trailing four quarters.

Shell is expected to witness year-over-year increase of 15.19% in its earnings in 2018.

Statoil is expected to witness year-over-year increase of 11.81% in its earnings in 2018.

Wall Street’s Next Amazon (NASDAQ:AMZN)

Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.

Click for details >>