Shale Daily / NGI All News Access

National Oilwell Varco Says Equipment Backlog Jumps

National Oilwell Varco Inc.'s (NOV) backlog for capital equipment orders jumped by one-third from the end of March to the end of June, the oilfield services operator said Tuesday.

Global operator NOV, which is based in Houston, provides mechanical components for land and offshore drilling rigs, land drilling and well servicing rigs, tubular inspection and internal tubular coatings, drill string equipment, lifting and handling equipment, and downhole drilling motors, bits and tools. It operates through three business segments: rig technology, petroleum services and supplies, and distribution services.

During the third quarter company said its rig technology segment booked a record $3.94 billion in new orders. The backlog for capital equipment orders reached $10.27 billion, which was 33% more than in 2Q2011. According to NGI's Shale Daily, NOV's 3Q2011 book-to-bill ratio was 2.79, its sixth consecutive quarterly increase and approaching the 3.0 level last seen in 3Q2006.

The 3Q2011 backlog is the highest level since 3Q2008 when NOV hit $11.8 billion, just before the drilling market collapsed.

"Strong oil and gas activity and continued outstanding execution enabled the company to achieve solid earnings again this quarter," said CEO Pete Miller. "All three segments posted higher sequential and year/year [y/y] revenues and operating profit...We continue to pursue new orders aggressively, and remain well positioned to execute strategic internal growth and acquisition opportunities."

Net income in 3Q2011 jumped to $532 million ($1.25/share) from $481 million ($1.13) in the year-ago period. Earnings per share climbed 30% y/y and were up 11% from 2Q2011. Revenues of $3.74 billion were 24% higher y/y and 6% higher sequentially. Operating profit totaled $778 million, which was almost 21% of sales.

In the rig technology segment, net profits reached $1.97 billion in the latest period, which was 19% higher than a year ago and 4% more than in 2Q2011. Operating profit for this segment was $528 million, or 26.8% of sales. Operating profit flow-through was 14% higher sequentially and 15% more than in the year-ago period. Revenue out of backlog for the segment increased 22% y/y and was up 1% sequentially. Non-backlog revenue improved 14% y/y and 12% percent sequentially "due to rising demand for aftermarket spare parts and services," NOV stated.

Revenues in the petroleum services unit jumped 34% y/y and 7% sequentially to $1.46 billion in the latest quarter, which NOV attributed to "rising levels of rig activity, seasonal recovery in Canada and improving pricing resulted in higher revenues and margins for the segment."

In the distribution services segment, quarterly revenues reached $480 million, which was 13% higher y/y and sequentially. The segment, said NOV, "benefited from sequential seasonal sales improvements in Canada, as well as strong sequential gains in U.S. operations on higher rig counts."

Comments powered by Disqus