NOV's 3Q Revenues Up 3% from Second Quarter 2009
National Oilwell Varco has reported that for the third quarter ended September 30, 2009 it earned net income of $385 million, or $0.92 per fully diluted share, compared to second quarter ended June 30, 2009 net income of $220 million, or $0.53 per fully diluted share.
Transaction and restructuring charges for the third quarter of 2009 were $17 million pre-tax or $0.03 per share after-tax, and for the second quarter of 2009 were $56 million pre-tax or $0.09 per share after-tax. The second quarter of 2009 also included asset impairment charges of $147 million pre-tax or $0.23 per share after-tax and $21 million or $0.05 per share after-tax related to additional tax charges on revaluation gains in Norway. Net income for the third quarter of 2009 excluding transaction and restructuring charges was $396 million, or $0.95 per fully diluted share.
The Company's revenues for the third quarter of 2009 were $3,087 million, an increase of 3 percent from the second quarter of 2009 and a decrease of 15 percent from the third quarter of 2008. Operating profit for the third quarter of 2009 was $618 million or 20.0 percent of sales, excluding transaction and restructuring charges. Operating profit flow-through, or the change in operating profit divided by the change in revenue, was up 38 percent from the second quarter to the third quarter of 2009, and was down 38 percent from the third quarter of 2008 to the third quarter of 2009.
During the third quarter of 2009, the Company added $333 million of orders to its capital equipment backlog, and removed $72 million of discontinued orders on cancelled projects and project change orders requested by customers. Backlog for capital equipment orders for the Company's Rig Technology segment was $7.3 billion at September 30, 2009 compared to $8.7 billion at June 30, 2009.
Pete Miller, Chairman, President and CEO of National Oilwell Varco, remarked, "The Company achieved solid results and strong cash flow this quarter, despite the current challenging market environment, thanks to the hard work of our dedicated employees. Continued outstanding execution of equipment orders and strong financial resources position us well for this marketplace, and we are well positioned for the inevitable recovery in drilling activity. While difficult credit market conditions have led to order rates below our expectations so far this year, we continue to pursue new rig opportunities aggressively, and seek and execute strategic internal growth and acquisition opportunities.
We are also pleased to have launched our new joint venture with Schlumberger to provide high-speed drill string telemetry systems to improve the efficiency and safety of oil and gas operations. We believe this joint venture will help us expand the commercial use of the IntelliServ® Broadband Network."
Third quarter revenues for the Rig Technology segment were $2,000 million, up 4 percent from the second quarter of 2009 and an increase of 4 percent from the third quarter of 2008. Operating profit for this segment was $579 million, or 29.0 percent of sales. Operating profit flow-through was up 52 percent from the second quarter of 2009 to the third quarter of 2009, and was up 105 percent from the third quarter of 2008 to the third quarter of 2009. Revenue out of backlog for the segment rose 12 percent sequentially and 17 percent year-over-year, to $1,599 million for the third quarter of 2009. Efficiencies and favorable cost results on large rig construction projects contributed to the strong margin performance by the segment.
Petroleum Services & Supplies
Revenues for the third quarter of 2009 for the Petroleum Services & Supplies segment were $882 million, down 3 percent compared to second quarter 2009 results and down 33 percent from the third quarter of 2008. Operating profit was $86 million, or 9.8 percent of revenue, down 10 percent from the second quarter of 2009. Operating profit flow-through was down 32 percent sequentially and down 57 percent from the third quarter of 2008 to the third quarter of 2009. Despite modest gains in North American rig counts, the segment continued to face pricing pressure and reduced purchasing by domestic customers, and slightly lower rig counts in international markets.
The Distribution Services segment generated third quarter revenues of $306 million, flat from the second quarter of 2009 and a decrease of 39 percent from the third quarter of 2008. Third quarter operating profit was $7 million or 2.3 percent of sales. Operating profit flow-through from the third quarter of 2008 to the third quarter of 2009 was down 19 percent. This segment benefited from sequential seasonal sales improvements in Canada, which was fully offset by lower domestic and other international sales, adversely affecting the mix.
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