National Oilwell Varco Announces First Quarter 2012 Earnings and Backlog
National Oilwell Varco, Inc. today reported that for its first quarter ended March 31, 2012 it earned net income of $606 million, or $1.42 per fully diluted share, compared to fourth quarter ended December 31, 2011 net income of $574 million, or $1.35 per fully diluted share. The first quarter 2012 results included transaction costs totaling $7 million pre-tax, and, excluding these, earnings were $612 million, or $1.44 per fully diluted share. Earnings per share improved 44 percent from the first quarter of 2011 and five percent from the fourth quarter of 2011, excluding transaction and devaluation charges from all periods.
Revenues for the first quarter of 2012 were $4.3 billion, an increase of one percent from the fourth quarter of 2011 and an increase of 37 percent from the first quarter of 2011. Operating profit for the quarter, excluding the transaction and devaluation charges, was $881 million, or 20.5 percent of sales. Sequentially, first quarter operating profit increased two percent, resulting in operating profit flow-through (change in operating profit divided by the change in revenue) of 48 percent, excluding transaction and devaluation charges. Year-over-year first quarter operating profit increased 40 percent, resulting in operating profit flow-through of 22 percent, excluding transaction and devaluation charges.
Capital equipment orders for the Company’s Rig Technology segment increased 15 percent sequentially to $1.91 billion during the first quarter, reflecting higher demand for drilling equipment for new build offshore rigs. At March 31, 2012 the segment’s backlog was $10.36 billion, up two percent from the end of the fourth quarter.
Pete Miller, Chairman, President and CEO of National Oilwell Varco, remarked, “Our Company got off to a good start in the first quarter of 2012, with strong results in all three segments. Our Petroleum Services & Supplies group performed exceptionally well, helped by high levels of oilfield activity which is spurring demand for all our products and services. National Oilwell Varco continues to provide critical, enabling technologies to improve the efficiency and safety of oil and gas operations around the globe.
Our outlook for demand for our capital equipment is very strong and our expectations high for the remainder of the year. Overall, efficient execution of orders in our backlog, innovation in our leading technologies, commitment to great service, and, most importantly, the hard work of the best team in the industry, led to solid earnings again this quarter.”
Rig Technology
First quarter revenues for the Rig Technology segment were $2.26 billion, a decrease of two percent from the fourth quarter of 2011 and an increase of 40 percent from the first quarter of 2011. Operating profit for this segment was $551 million, or 24.4 percent of sales. Operating profit flow-through was 20 percent from the first quarter of 2011 to the first quarter of 2012. Revenue out of backlog for the segment increased 52 percent year-over-year, and was down four percent from the fourth quarter of 2011, to $1.71 billion for the first quarter of 2012.
Petroleum Services & Supplies
Revenues for the first quarter of 2012 for the Petroleum Services & Supplies segment were $1.70 billion, up nine percent compared to fourth quarter 2011 results and up 35 percent from the first quarter of 2011. Operating profit was $388 million, or 22.8 percent of revenue, an increase of 29 percent from the fourth quarter of 2011. Operating profit flow-through was 65 percent sequentially and 32 percent from the first quarter of 2011 to the first quarter of 2012.
Distribution & Transmission
The Distribution & Transmission segment generated first quarter revenues of $564 million, which were essentially flat from the fourth quarter of 2011 and represented a 38 percent increase from the first quarter of 2011. First quarter operating profit was $43 million, or 7.6 percent of sales. Operating profit flow-through was 10 percent from the first quarter of 2011 to the first quarter of 2012.
