Houston, TX - National Oilwell Varco, Inc. reported that for the fourth quarter ended December 31, 2013 it earned net income of $658 million, or $1.53 per fully diluted share. Earnings improved three percent compared to the third quarter of 2013, and were down two percent compared to the fourth quarter of 2012. Excluding $16 million in pre-tax transaction charges, net income was $670 million, or $1.56 per fully diluted share, up 16 percent from the third quarter of 2013, and up five percent from the fourth quarter of 2012, excluding transaction charges from all periods.
Revenues reported for the full year 2013 were $22.77 billion, and net income was $2.33 billion, or $5.44 per fully diluted share. Operating profit for the full year 2013 was $3.41 billion. Excluding $156 million in pre-tax transaction charges and $102 million in pre-tax gains resulting from the settlement of an outstanding legal claim, net income was $2.36 billion, or $5.52 per fully diluted share, and operating profit was $3.47 billion or 15.2 percent of sales, for the full year 2013.
Revenues for the fourth quarter increased nine percent sequentially to $6.17 billion. Operating profit for the fourth quarter, excluding transaction charges, was $973 million or 15.8 percent of sales, up 14 percent from the third quarter of 2013. Operating profit flow-through, or the change in operating profit divided by the change in revenue, was 25 percent from the third quarter of 2013 to the fourth quarter of 2013, and was four percent from the fourth quarter of 2012 to the fourth quarter of 2013, excluding transaction charges from all periods. The Company’s fourth quarter 2013 results included a record $1.5 billion in cash flow from operations, 50 percent greater than the previous record set in the third quarter of 2013.
Backlog for capital equipment orders for the Company’s Rig Technology segment at December 31, 2013 was a record at $16.24 billion, up seven percent from the third quarter of 2013 and up 37 percent from the end of the fourth quarter of 2012. New orders during the quarter were $3.61 billion, reflecting continued strong demand for oilfield equipment.
Pete Miller, Chairman and CEO of National Oilwell Varco, remarked, “The fourth quarter marked a strong finish to a challenging, but solid year. For the year, the Company’s continued investments in technology, products, facilities, and our people, enabled us to better support our customers, and ultimately led to a year in which we set new annual records for revenues, capital equipment orders and backlog, and cash flow from operations. I would like to thank our customers for their continued trust in us, and all of our dedicated employees for their hard work and outstanding execution this year.
As we enter 2014, we recognize that there remain headwinds facing us in the North American land market. However, we are excited to be entering the year with strong financial resources, a very solid backlog, and an experienced group of employees at NOV that remains committed to delivering the highest quality of products and services to our customers. We are also excited about the upcoming spin-off of NOV’s distribution business from the remainder of the Company in 2014, which we believe will enable the distribution business and the remainder of NOV to have the enhanced operational flexibility to focus on their specific products, services and customers.”
Rig Technology
Fourth quarter revenues for the Rig Technology segment were $3.31 billion, an increase of 16 percent from the third quarter of 2013 and an increase of 14 percent from the fourth quarter of 2012. Operating profit for this segment was $697 million, or 21.1 percent of sales, an increase of 15 percent from the third quarter of 2013 and an increase of eight percent from the fourth quarter of 2012. Sequential operating profit flow-through was 19 percent. Year-over-year operating profit flow-through was 12 percent. Revenue out of backlog for the segment increased 20 percent sequentially and increased 14 percent year-over-year, to $2.52 billion for the fourth quarter of 2013.
Petroleum Services & Supplies
Revenues for the fourth quarter of 2013 for the Petroleum Services & Supplies segment were $1.93 billion, up six percent compared to third quarter 2013 results and up 9 percent compared to fourth quarter 2012 results. Operating profit was $366 million, or 19.0 percent of sales, up 13 percent from the third quarter of 2013 and an increase of three percent from the fourth quarter of 2012. Sequential operating profit flow-through was 36 percent. Operating profit flow-through was seven percent from the fourth quarter of 2012 to the fourth quarter of 2013.
Distribution & Transmission
Fourth quarter revenues for the Distribution & Transmission segment were $1.25 billion, down seven percent from the third quarter of 2013, and down one percent from the fourth quarter of 2012. Fourth quarter operating profit was $60 million or 4.8 percent of sales.
