NOV Unveils 1st Quarter Earnings, Backlog
National Oilwell Varco, Inc. reported that for its first quarter ended March 31, 2009 it earned net income of $470 million, or $1.13 per fully diluted share, compared to fourth quarter ended December 31, 2008 net income of $585 million, or $1.40 per fully diluted share. Earnings per share increased 2 percent compared to the first quarter of 2008, when the Company earned $398 million or $1.11 per fully diluted share.
In addition to reported results, the Company is also providing supplemental results, which include the combined financial results for the Company and Grant Prideco as if the April 21, 2008 acquisition occurred at the beginning of 2008. The Company's revenues and operating profit for the first quarter of 2009 were $3,481 million and $720 million, respectively. Revenues decreased 9 percent from the fourth quarter of 2008, and increased 10 percent from the first quarter of 2008, on this adjusted combined basis. Operating profit flow-through, or the change in operating profit divided by the change in revenue, was up 17 percent from the first quarter of 2008 to the first quarter of 2009, on a combined basis, and down 48 percent from the fourth quarter of 2008 to the first quarter of 2009.
New capital equipment orders during the quarter were $240 million, net of orders removed from backlog of $32 million. Backlog for capital equipment orders for the Company's Rig Technology segment was $9.6 billion at March 31, 2009 compared to $11.1 billion at December 31, 2008.
Pete Miller, Chairman, President and CEO of National Oilwell Varco, remarked, "Our solid backlog for drilling equipment enabled our Company to generate strong earnings in the first quarter, despite a sharp downturn in drilling activity and available credit to our customers. Though the pace of new capital equipment orders has slowed in the short run, we believe investment in drilling equipment will resume, to enable the industry to explore new oil and gas frontiers. Nevertheless market conditions remain very challenging, and the timing of a recovery is uncertain. We are well positioned for this market, given our strong financial resources, high cash flow, and exceptional backlog through 2010. We plan to execute strategic opportunities arising from the current downturn, both internal and external, to further enhance our business."
First quarter revenues for the Rig Technology segment were $2,199 million, an increase of 5 percent over the fourth quarter of 2008 and an increase of 37 percent from the first quarter of 2008. Operating profit for this segment was $606 million, or 27.6 percent of sales. Operating profit flow-through was up 44 percent from the fourth quarter of 2008 to the first quarter of 2009, and was up 34 percent from the first quarter of 2008 to the first quarter of 2009. Revenue out of backlog for the segment increased 15 percent sequentially and rose 49 percent year-over-year, to $1,688 million for the first quarter of 2009. Non-backlog revenue declined 18 percent sequentially, and increased 8 percent from the first quarter of 2008.
Petroleum Services & Supplies
Revenues for the first quarter of 2009 for the Petroleum Services & Supplies segment were $1,014 million, down 27 percent compared to fourth quarter 2008 results and down 23 percent from the first quarter of 2008, on an adjusted combined basis for the merger. Operating profit was $164 million, or 16.2 percent of revenue, a decrease of 52 percent from the fourth quarter of 2008. Operating profit flow-through was down 47 percent sequentially and down 50 percent from the prior year, on an adjusted combined basis for the merger.
The Distribution Services segment generated first quarter revenues of $408 million, which were down 16 percent from the fourth quarter of 2008 and represented an 11 percent increase from the first quarter of 2008. First quarter operating profit was $25 million or 6.1 percent of sales. Operating profit flow-through from the first quarter of 2008 to the first quarter of 2009 was up 14 percent. Operating profit flow-through was down 24 percent from the fourth quarter of 2008 to the first quarter of 2009.
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