Houston, TX - National Oilwell Varco, Inc. today reported that for its first quarter ended March 31, 2013 it earned net income of $502 million, or $1.17 per fully diluted share, compared to fourth quarter ended December 31, 2012 net income of $668 million, or $1.56 per fully diluted share. The first quarter 2013 results included transaction costs primarily related to the Robbins & Myers acquisition and Venezuela currency devaluation charges, which combined for a total of $73 million in pre-tax costs and charges. Excluding these costs and charges, earnings were $553 million, or $1.29 per fully diluted share.
Revenues for the first quarter of 2013 were $5.31 billion, a decrease of seven percent from the fourth quarter of 2012 and an increase of 23 percent from the first quarter of 2012. Operating profit for the quarter, excluding the transaction charges, was $816 million, or 15.4 percent of sales. Sequentially, first quarter operating profit decreased 14 percent, while year-over-year first quarter operating profit decreased seven percent.
Backlog for capital equipment orders for the Company’s Rig Technology segment at March 31, 2013 was a record at $12.92 billion, up eight percent from the fourth quarter of 2012, and up 24 percent from the first quarter of 2012. New orders during the quarter were $3.04 billion, reflecting continued strong demand for oilfield equipment.
Pete Miller, Chairman and CEO of National Oilwell Varco, remarked, “The North American market was softer than anticipated; however, our strong backlog for drilling equipment, coupled with the recent investments that we have made in acquisitions, international expansion and incremental capacity, enabled our Company to generate solid earnings in the first quarter. As we move through the year, we expect to see continued improvements in international activity, strong industry demand for both floaters and jackups, and a heightened level of interest and orders in our floating production equipment offering.” Miller continued, “Additionally, while we are cautious regarding the timing of a North America recovery, we remain confident that land drillers and well service firms will soon consume their current inventories, ultimately requiring more of our products and services. Until that time, we take comfort in knowing that we are well positioned for this market, given our strong financial resources, unparalleled market presence, exceptional backlog, and extraordinary workforce.”
First quarter revenues for the Rig Technology segment were $2.63 billion, a decrease of nine percent from the fourth quarter of 2012 and an increase of 16 percent from the first quarter of 2012. Operating profit for this segment was $557 million, or 21.2 percent of sales. Operating profit flow-through (change in operating profit divided by the change in revenue) was two percent from the first quarter of 2012 to the first quarter of 2013. Revenue out of backlog for the segment increased 16 percent year-over-year, and was down ten percent from the fourth quarter of 2012 to $1.98 billion for the first quarter of 2013.
Petroleum Services & Supplies
Revenues for the first quarter of 2013 for the Petroleum Services & Supplies segment were $1.70 billion, down four percent compared to fourth quarter 2012 results and flat from the first quarter of 2012. Operating profit was $311 million, or 18.3 percent of revenue. Operating profit flow-through was down 64 percent from the fourth quarter of 2012 to the first quarter of 2013.
Distribution & Transmission
The Distribution & Transmission segment generated first quarter revenues of $1.23 billion, down three percent from the fourth quarter of 2012 and up 118 percent from the first quarter of 2012 (due mostly to previously disclosed mergers completed in 2012). First quarter operating profit was $65 million, or 5.3 percent of sales. Operating profit flow-through was three percent from the first quarter of 2012 to the first quarter of 2013.
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