National Oilwell Varco cuts its dividend 89 percentStaff writer ▼ | April 11, 2016
National Oilwell Varco board has approved a plan to reduce the Company’s quarterly dividend to $0.05 per share.
Oil and gas industry Reducing the dividend to 5 cents from 46 cents per share
“Substantial decreases in 2016 E&P capital plans are driving activity levels to new record lows, resulting in significantly diminished demand for equipment and services.
“Based on preliminary information, first quarter revenues will be down approximately 20% from the $2.7 billion recognized in the fourth quarter of 2015.
“Importantly, although the near-term outlook remains challenging, NOV remains strong financially. NOV’s total debt decreased by over $500 million during the first three months of 2016 and the decision to reduce the dividend is expected to improve future net cash flow by approximately $615 million per year.
“We believe the dramatic reductions in capital spending are accelerating global production declines, setting the stage for a recovery in demand for NOV equipment and technologies.
“Reducing our dividend will allow us to preserve capital to invest in future growth opportunities and enhance the core capabilities our customers will need when industry activity increases.” ■