National Oilwell Profit Rises on Deepwater Gear Orders
National Oilwell Varco Inc. (NOV), the largest U.S. maker of oilfield equipment, said fourth quarter profit rose as customers boosted orders for deepwater rigs.
Net income climbed to $668 million, or $1.56 a share, from $574 million, or $1.35, a year earlier, Houston-based National Oilwell Varco said today in a statement on Business Wire. Excluding one-time items, the company earned five cents more than the $1.44 average of 27 analysts’ estimates compiled by Bloomberg.
Brent oil prices, an international benchmark, rose 1 percent to average $110.13 in the quarter. The company’s biggest ticket item is its sale of a drilling-rig package that makes up almost half the cost of a $600 million ultra-deepwater vessel.
“The momentum continues in the deepwater,” Trey Stolz, an analyst at Iberia Capital Partners in New Orleans, said in a telephone interview before the earnings were released. He rates the shares at outperform, which means investors should buy the stock, and owns none. National Oilwell is likely to win deepwater rig packages that are currently under construction because they’ve won contracts from the companies in the past, Stolz said.
Operating profit for the rig-technology segment, the company’s largest unit, was expected to grow 2.3 percent to $617 million compared to a year earlier, Jeff Tillery, an analyst at Tudor Pickering Holt & Co., said in a telephone interview before the earnings were released.
The earnings statement was released before the start of regular trading on U.S. markets. National Oilwell has 28 buy ratings from analysts and seven holds. The shares rose 0.7 percent to $74.14 yesterday in New York.
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