National Oilwell Varco Spotlights 'Solid' 4Q10 Profits
National Oilwell reported that for the fourth quarter ended December 31, 2010 it earned net income of $440 million, or $1.05 per fully diluted share. Sequentially, earnings improved nine percent compared to third quarter ended September 30, 2010 net income of $404 million, or $0.96 per fully diluted share. Compared to fourth quarter 2009 earnings of $394 million or $0.94 per fully diluted share, fourth quarter 2010 earnings improved 12 percent.
Revenues reported for the full year 2010 were $12.16 billion, and net income was $1.67 billion, or $3.98 per fully diluted share. Operating profit for the full year 2010 was $2.42 billion. Excluding transaction charges in 2010, net income was $1.71 billion, or $4.09 per fully diluted share, and operating profit was $2.47 billion or 20.3 percent of sales, for the full year 2010.
Revenues for the fourth quarter increased five percent sequentially to $3.17 billion. Operating profit for the fourth quarter, excluding transaction charges of $1 million pre-tax, was $625 million, up five percent from the third quarter of 2010. Operating profit flow-through, or the change in operating profit divided by the change in revenue, from the third quarter of 2010 to the fourth quarter of 2010 was 17 percent excluding transaction charges.
Backlog for capital equipment orders for the Company's Rig Technology segment at December 31, 2010 was $5.01 billion, which was up three percent from the end of the third quarter of 2010. New orders during the quarter were $1.41 billion, reflecting higher demand for drilling equipment for new build offshore rigs, and higher demand for well intervention and stimulation equipment.
Pete Miller, Chairman, President and CEO of National Oilwell Varco, remarked, "We achieved solid results in 2010. We were able to make our businesses more efficient, while continuing to invest for future growth. We spent approximately $600 million on acquisitions, launched several expansion projects across many of our existing business lines, and nevertheless ended the year with approximately $3.3 billion in cash. I would like to thank all of our dedicated employees for their hard work and outstanding execution to deliver this result.
"2011 looks bright as we enter the year with strong financial resources, a solid backlog, leading technology, and an experienced team capable of delivering great service and products to our customers and excellent financial results to our shareholders. We believe that the oil and gas industry will continue to need to upgrade the world's rig fleet, and we look forward to continuing to help our customers retool their rigs to improve safety, reduce environmental impact, and drive higher efficiency."
Fourth quarter revenues for the Rig Technology segment were $1.76 billion, an increase of six percent from the third quarter of 2010 and a decrease of 11 percent from the fourth quarter of 2009. Operating profit for this segment was $501 million, or 28.5 percent of sales, an increase of four percent from the third quarter of 2010. Revenue out of backlog for the segment increased 10 percent sequentially and decreased 16 percent year-over-year, to $1.3 billion for the fourth quarter of 2010.
Petroleum Services & Supplies
Revenues for the fourth quarter of 2010 for the Petroleum Services & Supplies segment were $1.14 billion, up four percent compared to third quarter 2010 results and up 21 percent compared to fourth quarter 2009 results. Operating profit was $170 million, or 15.0 percent of sales, an increase of four percent from the third quarter of 2010 and an increase of 59 percent from the fourth quarter of 2009. Operating profit flow-through was 13 percent sequentially and 31 percent from the fourth quarter of 2009 to the fourth quarter of 2010.
Fourth quarter revenues for the Distribution Services segment were $423 million, essentially flat from the third quarter of 2010 and up 28 percent from the fourth quarter of 2009. Fourth quarter operating profit was $30 million or 7.1 percent of sales. Operating profit flow-through was 24 percent from the fourth quarter of 2009 to the fourth quarter of 2010.
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