National Oilwell Varco Inc. Earnings Cheat Sheet: Profit Rises Behind Revenue Boost

S&P 500 (NYSE:SPY) component National Oilwell Varco Inc. (NYSE:NOV) reported net income above Wall Street’s expectations for the third quarter. National Oilwell Varco 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 Earnings Cheat Sheet for the Third Quarter

Results: Net income for National Oilwell Varco Inc. rose to $532 million ($1.25 per share) vs. $404 million (96 cents per share) in the same quarter a year earlier. This marks a rise of 31.7% from the year earlier quarter.

Revenue: Rose 24.2% to $3.74 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: NOV reported adjusted net income of $1.26 per share. By that measure, the company beat the mean estimate of $1.17 per share. It beat the average revenue estimate of $3.66 billion.

Quoting Management: Pete Miller, Chairman, President and CEO of National Oilwell Varco, remarked, “Strong oil and gas activity and continued outstanding execution enabled the Company to achieve solid earnings again this quarter. All three segments posted higher sequential and year-over-year revenues and operating profit. We are very pleased by the strong sequential margin expansions posted by our Petroleum Services & Supplies and Distribution Services segments, as well as the record level of bookings into our capital equipment backlog for the Rig Technology segment, during the third quarter. We continue to pursue new orders aggressively, and remain well-positioned to execute strategic internal growth and acquisition opportunities.”

Key Stats:

Revenue has risen the past four quarters. Revenue increased 19.4% to $3.51 billion in the second quarter. The figure rose 3.8% in the first quarter from the year earlier and climbed 1.2% in the fourth quarter of the last fiscal year from the year-ago quarter.

The company has now beaten estimates the last two quarters. In the second quarter, it topped expectations with net income of $1.14 versus a mean estimate of net income of $1.01 per share.

The company has now seen net income rise in two straight quarters. In the second quarter, net income rose 20% from the year earlier.

Looking Forward: Analysts appear increasingly optimistic about the company’s results for the next quarter. The average estimate for the fourth quarter has moved up from $1.12 a share to $1.19 over the last ninety days. For the fiscal year, the average estimate has moved up from $4.22 a share to $4.51 over the last ninety days.

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), and Schlumberger Limited. (NYSE:SLB).

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(Source: Xignite Financials)