NOV claimed on Wednesday its first-quarter revenue and earnings will come in below its prior outlook due to delays in equipment deliveries and higher logistics costs linked to the war in the Middle East.
Shares of the oilfield equipment and services provider fell nearly three per cent in premarket trading.
The company estimated the conflict reduced revenue by around $54 million and adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) by about $32 million.
"These challenges disproportionately affected quarter-end deliveries of capital equipment and products, including spare parts, in the region, while our more service-oriented offerings were less affected," said CEO Jose Bayardo.
"Higher shipping and freight costs and reduced absorption in our manufacturing facilities further amplified decremental margins."
Rising security risks and damage to energy infrastructure have driven drilling and oilfield activity sharply lower across the Middle East, cutting demand for oilfield services and equipment in one of the world's top energy-producing regions.
Industry bellwether SLB last month said the conflict would reduce its first-quarter earnings by about six cents to nine cents per share and push revenue below expectations.
Major energy companies are also taking precautionary steps. ExxonMobil has evacuated non-essential staff from some Middle East operations after the war broke out between Iran and US-Israel.
NOV had previously forecast first-quarter adjusted EBITDA in the range of $200 million to $225 million and its revenue to decline one to three per cent from a year earlier.
It now expects to report revenue of about $2.05 billion for the quarter, with operating profit of $47 million and adjusted EBITDA of $177 million.
The company said none of its facilities in the region were damaged and it is working to mitigate delays and rising costs.
(Reporting by Arunima Kumar in Bengaluru; Editing by Shilpi Majumdar and Leroy Leo)
