National Oilwell Varco Inc. (NOV) fell the most in more than two years after forecasting a slowdown in orders for offshore rig equipment.
The largest U.S. maker of oilfield equipment declined 6.7 percent to $77.88 at 12:14 p.m. in New York after earlier losing as much as 7.3 percent, the biggest intraday drop since November 2011.
The backlog for new rig-technology equipment, which hit a company record in the first quarter at $16.4 billion, should fall to the range of $14 billion to $15 billion by the end of the year, Chief Executive Officer Clay Williams told analysts and investors today on a conference call. Offshore rig equipment is the Houston-based company’s biggest business.
“I didn’t think it’d be that much lower,” Rob Desai, an analyst at Edward Jones in St. Louis, who rates the stock a buy and owns none, said of the year-end backlog projection today in a phone interview.
Rig contractors and equipment makers are preparing for about 100 new floating drilling rigs on the order books to be delivered in the next few years, one of the largest surges in supply since the advent of deepwater rigs.
New orders for rig equipment in the first three months of the year dropped 23 percent from a year earlier to $2.33 billion, the company said today in a statement. National Oilwell Varco reported adjusted first-quarter earnings that beat by 2 cents the $1.38 average of 27 analysts’ estimates compiled by Bloomberg.
“The newbuild rig market is starting to show signs of shakiness,” Trey Stolz, an analyst at Iberia Capital Partners LLC in New Orleans who rates the shares the equivalent of buy and owns none, said today in a phone interview. “You’re starting to see some of those concerns in the deepwater play out in the equipment market.”
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