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National Oilwell profits surge
Oct. 23, 2008, 11:47AM
National Oilwell Varco, the largest U.S. maker of oil field equipment, said third-quarter profit gained 50 percent as record oil prices spurred customers to increase spending on rigs and supplies.
Net income rose to $547.7 million, or $1.31 a share, from $366 million, or $1.02, a year earlier, Houston-based National Oilwell said today in a statement. Revenue climbed 40 percent to $3.61 billion. New orders in the quarter were $2.4 billion.
Excluding costs of 4 cents a share related to its purchase of Grant Prideco and 9 cents due to disruptions from Hurricane Ike in September, National Oilwell beat the $1.30 average estimate of 21 analysts surveyed by Bloomberg.
“Overall, it was a darn good quarter,” said Michael Henzi, an analyst at Sterne, Agee & Leach Inc. who rates the stock as a “hold” and doesn’t own any.
He questioned whether customers will continue to “think it’s prudent to spend precious liquidity now, even though they in general have a lot of liquidity.” While he doesn’t expect order cancellations, Henzi said it’s possible customers may wait before ordering more in the short term while credit is tight.
Oil futures on the New York Mercantile Exchange traded 57 percent higher than a year earlier in the third quarter and hit a record high above $147 a barrel in July. U.S. natural-gas futures had an average price of almost $9 per million British thermal units, up 44 percent from last year.
Oil and natural-gas companies ramped up spending during that time and increased National Oilwell’s backlog for orders to $11.8 billion at the end of September, up from $10.8 billion at the end of June.
“They’re moving stuff out the door,” said David Rewcastle, an analyst at Argus Research in New York who has a “buy” rating on the shares and doesn’t own any. “They’ve now hit their stride.”
The number of oil and gas rigs active around the world rose in September to 3,557, the highest since 1985, according to a count by Baker Hughes Inc.
Even as oil has dropped more than $70 a barrel, Rewcastle said he’s not worried about National Oilwell’s work falling off because the rigs are still going to be built.
“They’re in a sweet spot,” he said. “They’re like the guys selling picks and shovels at the mouth of the gold mine.”
http://www.chron.com/disp/story.mpl/headline/biz/6074272.html
NEW YORK (MarketWatch) -- National Oilwell Varco Inc. said Thursday third-quarter net income rose by about 50% as it absorbed the benefits of its Grant Prideco acquisition, as the drilling-equipment giant also moved to reassure investors that business remains strong.
Shares of Houston-based National Oilwell Varco (NOV: national oilwell varco inc com
News, chart, profile,
Last: 26.78+2.30+9.40%) rose more than 9% to close at $26.78.
Quarterly sales rose to $3.6 billion from the prior year's $2.58 billion.
4:40 p.m. EDT Oct. 23, 2008
Oct. 23, 2008, 11:47AM
National Oilwell Varco, the largest U.S. maker of oil field equipment, said third-quarter profit gained 50 percent as record oil prices spurred customers to increase spending on rigs and supplies.
Net income rose to $547.7 million, or $1.31 a share, from $366 million, or $1.02, a year earlier, Houston-based National Oilwell said today in a statement. Revenue climbed 40 percent to $3.61 billion. New orders in the quarter were $2.4 billion.
Excluding costs of 4 cents a share related to its purchase of Grant Prideco and 9 cents due to disruptions from Hurricane Ike in September, National Oilwell beat the $1.30 average estimate of 21 analysts surveyed by Bloomberg.
“Overall, it was a darn good quarter,” said Michael Henzi, an analyst at Sterne, Agee & Leach Inc. who rates the stock as a “hold” and doesn’t own any.
He questioned whether customers will continue to “think it’s prudent to spend precious liquidity now, even though they in general have a lot of liquidity.” While he doesn’t expect order cancellations, Henzi said it’s possible customers may wait before ordering more in the short term while credit is tight.
Oil futures on the New York Mercantile Exchange traded 57 percent higher than a year earlier in the third quarter and hit a record high above $147 a barrel in July. U.S. natural-gas futures had an average price of almost $9 per million British thermal units, up 44 percent from last year.
Oil and natural-gas companies ramped up spending during that time and increased National Oilwell’s backlog for orders to $11.8 billion at the end of September, up from $10.8 billion at the end of June.
“They’re moving stuff out the door,” said David Rewcastle, an analyst at Argus Research in New York who has a “buy” rating on the shares and doesn’t own any. “They’ve now hit their stride.”
The number of oil and gas rigs active around the world rose in September to 3,557, the highest since 1985, according to a count by Baker Hughes Inc.
Even as oil has dropped more than $70 a barrel, Rewcastle said he’s not worried about National Oilwell’s work falling off because the rigs are still going to be built.
“They’re in a sweet spot,” he said. “They’re like the guys selling picks and shovels at the mouth of the gold mine.”
http://www.chron.com/disp/story.mpl/headline/biz/6074272.html
NEW YORK (MarketWatch) -- National Oilwell Varco Inc. said Thursday third-quarter net income rose by about 50% as it absorbed the benefits of its Grant Prideco acquisition, as the drilling-equipment giant also moved to reassure investors that business remains strong.
Shares of Houston-based National Oilwell Varco (NOV: national oilwell varco inc com
News, chart, profile,
Last: 26.78+2.30+9.40%) rose more than 9% to close at $26.78.
Quarterly sales rose to $3.6 billion from the prior year's $2.58 billion.
4:40 p.m. EDT Oct. 23, 2008
