National Oilwell Varco Earnings Cheat Sheet: Smooth Quarter, Yet Shares Decline

S&P 500 (NYSE:SPY) component National Oilwell Varco, Inc. (NYSE:NOV) reported its results for the first quarter. National Oilwell Varco, Inc. provides equipment and components used in oil and gas drilling and production operations, oilfield services, and supply chain integration services.

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National Oilwell Varco, Inc. Earnings Cheat Sheet for the First Quarter

Results: Net income for National Oilwell Varco, Inc. fell to $407 million (96 cents/share) vs. $422 million ($1.01/share) a year earlier. A decline of 3.6% from the year earlier quarter.

Revenue: Rose 3.8% to $3.15 billion YoY.

Actual vs. Wall St. Expectations: NOV fell short of the mean analyst estimate of $1/share. Estimates ranged from 95 cents per share to $1.06 per share.

Quoting Management: Pete Miller, Chairman, President and CEO of National Oilwell Varco, remarked, “Our Company got off to a good start in the first quarter of 2011. Our Petroleum Services & Supplies segment performed exceptionally well, and helped offset expected lower revenues from new rig projects. The high levels of oilfield activity are spurring demand for all our products and services, serving to reload our backlog of Rig Technology capital equipment, and enabling our Distribution Services team to put up very solid revenues and margins once again.

We are very excited that bookings into our capital equipment backlog were more than double our shipments this quarter. Overall, efficient execution of orders in our backlog, our leading technologies, great service, and, most importantly, the best workforce in the industry, led to solid earnings this quarter. Gradually recovering economies, high oil prices, a pressing need for modern, efficient drilling and well stimulation equipment, and rising consumption of drillpipe, downhole tools, and other critical oilfield products provide a great outlook for National Oilwell Varco.”

Key Stats: Last quarter’s profit decrease breaks a streak of three consecutive quarters of year-over-year profit increases. Net income rose 11.7% in the fourth quarter of the last fiscal year from the year earlier while the figure rose 4.9% in the third quarter of the last fiscal year and 82.3% four quarters ago.

Over the last five quarters, revenue has fallen an average of 2.5% year over year. The biggest drop came in the first quarter of the last fiscal year, when revenue fell 12.9% from the year earlier quarter.

Competitors to Watch: Baker Hughes Incorporated (NYSE:BHI), Tesco Corporation (NASDAQ:TESO), Cameron Intl. Corp. (NYSE:CAM), T-3 Energy Services, Inc. (NASDAQ:TTES), Oil States Intl., Inc. (NYSE:OIS), Flotek Industries, Inc. (NYSE:FTK), FMC Technologies, Inc. (NYSE:FTI), Lufkin Industries, Inc. (NASDAQ:LUFK), Halliburton (NYSE:HAL), Weatherford (NYSE:WFT) and Schlumberger Limited. (NYSE:SLB).

Today’s Performance: Shares of NOV are trading at $77.11 as of April 27, 2011 at 11:17 AM ET, down over 4% from the previous close.

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