National Oilwell Varco Announces All-Time Record Backlog and Second Quarter 2013 Earnings

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National Oilwell Varco Announces All-Time Record Backlog and Second Quarter 2013 Earnings

HOUSTON--(BUSINESS WIRE)-- National Oilwell Varco, Inc. (NYS: NOV) today reported that for its second quarter ended June 30, 2013 it earned net income of $531 million, or $1.24 per fully diluted share, compared to first quarter ended March 31, 2013 net income of $502 million, or $1.17 per fully diluted share. Excluding transaction charges of $57 million pre-tax, second quarter 2013 net income was $568 million, or $1.33 per fully diluted share.

The Company's revenues for the second quarter of 2013 were $5.60 billion, which improved six percent from the first quarter of 2013 and 18 percent from the second quarter of 2012. Operating profit for the second quarter of 2013 was $826 million, or 14.7 percent of sales, excluding transaction charges.


Backlog for capital equipment orders for the Company's Rig Technology segment was at a historic record level of $13.95 billion as of June 30, 2013, up eight percent from the end of the first quarter of 2013 and up 24 percent from the end of the second quarter of 2012. New orders during the quarter were $3.15 billion, reflecting continued strong demand for oilfield equipment.

Pete Miller, Chairman and CEO of National Oilwell Varco, remarked, "The second quarter of 2013 marked another solid quarter for NOV. Despite seasonal slowdowns in Canada and a challenging US market, the Company produced sequential gains in revenues and earnings, which were largely driven by strong revenues out of backlog and significant international growth within our Petroleum Services & Supplies and Distribution & Transmission segments. The Company also ended the quarter with an all-time record backlog of capital equipment, as orders for new floaters and jackups continued at a strong pace, and orders for our floating production equipment more than doubled from the first quarter." Miller continued, "In addition to our solid operating results, we are also proud to have doubled our regular dividend in the second quarter, further demonstrating our commitment to return more cash to our shareholders. As we move through the second half of 2013, we look forward to continued demand for our offshore drilling and floating production equipment, a gradual rebound in Canada, and continued growth from our other international operations."

Rig Technology

Second quarter revenues for the Rig Technology segment were $2.83 billion, an increase of eight percent from the first quarter of 2013 and an increase of 18 percent from the second quarter of 2012. Operating profit for this segment was $587 million, or 20.7 percent of revenue. Operating profit flow-through (change in operating profit divided by the change in revenue) was 15 percent sequentially and four percent from the second quarter of 2012 to the second quarter of 2013. Revenue out of backlog for the segment increased seven percent sequentially and increased 17 percent year-over-year to $2.12 billion for the second quarter of 2013.

Petroleum Services & Supplies

Revenues for the second quarter of 2013 for the Petroleum Services & Supplies segment were $1.75 billion, up three percent compared to first quarter 2013 results and down two percent from the second quarter of 2012. Operating profit was $304 million, or 17.4 percent of revenue, a decrease of two percent from the first quarter of 2013. Double-digit percentage growth in international markets, combined with a full quarter contribution from Robbins & Myers, was partly offset by second quarter seasonal declines in Canada.

Distribution & Transmission

The Distribution & Transmission segment generated second quarter revenues of $1.30 billion, which were up six percent from the first quarter of 2013 and up 66 percent from the second quarter of 2012 (due mostly to previously disclosed mergers completed in 2012). Second quarter operating profit was $71 million, or 5.5 percent of revenue, up nine percent from the first quarter of 2013 and up 31 percent from the second quarter of 2012. Sequential flow-through was nine percent, and year-over-year flow-through was three percent. Strong international sales and a full quarter contribution from Robbins & Myers fully offset the seasonal break-up declines in Canada.

The Company has scheduled a conference call for July 30, 2013, at 8:00 a.m. Central Time to discuss second quarter results. The call will be broadcast through the Investor Relations link on National Oilwell Varco's web site at www.nov.com, and a replay will be available on the site for thirty days following the conference. Participants may also join the conference call by dialing 1-800-447-0521within North America or 1-847-413-3238outside of North America five to ten minutes prior to the scheduled start time and asking for the "National Oilwell Varco Earnings Conference Call."

National Oilwell Varco is a worldwide leader in the design, manufacture and sale of equipment and components used in oil and gas drilling and production operations, the provision of oilfield services, and supply chain integration services to the upstream oil and gas industry.

Statements made in this press release that are forward-looking in nature are intended to be "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934 and may involve risks and uncertainties. These statements may differ materially from actual future events or results. Readers are referred to documents filed by National Oilwell Varco with the Securities and Exchange Commission, including the Annual Report on Form 10-K, which identify significant risk factors which could cause actual results to differ from those contained in the forward-looking statements.

     

NATIONAL OILWELL VARCO, INC.

CONSOLIDATED BALANCE SHEETS

(In millions, except share data)

 
June 30,December 31,
20132012
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents$2,327$3,319
Receivables, net4,4244,320
Inventories, net6,0835,891
Costs in excess of billings1,4481,225
Deferred income taxes360349
Prepaid and other current assets 579  574
Total current assets15,22115,678
 
Property, plant and equipment, net3,2102,945
Deferred income taxes395413
Goodwill8,9977,172
Intangibles, net5,3054,743
Investment in unconsolidated affiliates357393
Other assets 108  140
$33,593 $31,484
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
Current liabilities:
Accounts payable$1,232$1,200
Accrued liabilities2,6812,571
Billings in excess of costs1,1591,189
Current portion of long-term debt and short-term borrowings-1
Accrued income taxes248355
Deferred income taxes 299  333
Total current liabilities5,6195,649
 
Long-term debt4,1203,148
Deferred income taxes2,4581,997
Other liabilities 445  334
Total liabilities 12,642  11,128
 
Commitments and contingencies
 
Stockholders' equity:

Common stock - par value $.01; 1 billion shares authorized; 427,402,817 and

426,928,322 shares issued and outstanding at June 30, 2013 and December 31, 2012

44
Additional paid-in capital8,8058,743
Accumulated other comprehensive income (loss)(201)107
Retained earnings 12,251  11,385
Total Company stockholders' equity20,85920,239
Noncontrolling interests 92  117
Total stockholders' equity 20,951  20,356
$33,593 $31,484
           

NATIONAL OILWELL VARCO, INC.

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

(In millions, except per share data)

 
Three Months EndedSix Months Ended
June 30,March 31,June 30,
20132012201320132012
Revenue:
Rig Technology$2,833$2,405$2,628$5,461$4,664
Petroleum Services & Supplies1,7491,7761,7013,4503,480
Distribution & Transmission1,2957801,2272,5221,344
Eliminations (276) (227) (249) (525) (451)
 
Total revenue5,6014,7345,30710,9089,037
 
Gross profit1,3201,3211,2872,6072,592
 
Gross profit %23.6%27.9%24.3%23.9%28.7%
 
Selling, general, and administrative494414471965804
 
Other costs 57  28  73  130  35 
 
Operating profit7698797431,5121,753
 
Interest and financial costs(30)(9)(28)(58)(17)
Interest income33366
Equity income in unconsolidated affiliates1519193436
Other income (expense), net 13  (5) (13) -  (18)
 
Income before income taxes7708877241,4941,760
 
Provision for income taxes 239  285  224  463  554 
 
Net income5316025001,0311,206
 
Net income (loss) attributable to noncontrolling interests -  (3) (2) (2) (5)
Net income attributable to Company$531 $605 $502 $1,033 $1,211 
 
Net income attributable to Company per share:
 
Basic$1.25 $1.42 $1.18 $2.42 $2.85 
 
Diluted$1.24 $1.42 $1.17 $2.41 $2.84 
 
Weighted average shares outstanding:
 
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