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UPDATE 2-National Oilwell 2nd-qtr profit rises 32 percent
July 29, 2008 / 1:48 PM / 9 years ago

UPDATE 2-National Oilwell 2nd-qtr profit rises 32 percent

(Adds byline, analyst quote, details, quote from conference call, updates share price)

By Anna Driver

HOUSTON, July 29 (Reuters) - National Oilwell Varco Inc (NOV.N), an oilfield services company, said on Tuesday its second-quarter profit rose 32 percent, exceeding Wall Street estimates, as high energy prices lifted demand for its drilling equipment.

The company cited two areas of robust growth -- the offshore market where rig supplies are tight, and onshore North America, where exploration companies need new rigs as they expand rapidly in shale plays like the Haynesville in Louisiana.

“We feel real confident that things are looking pretty good,” Pete Miller, the chief executive, told analysts on a conference call. “I think you’ll continue to see backlog over the next foreseeable future be very good.”

Bill Herbert, oilfield services analyst with research firm and investment bank Simmons & Co International, characterized the results as “exceedingly strong” in a note to clients.

Profit in the quarter soared to $421.7 million, or $1.04 per share, from $318.5 million, or 89 cents per share, in the same quarter a year earlier.

Profit, excluding one-time items related to its April merger with Grant Prideco Inc and a tax provision, was $486.5 million, or $1.20 per fully diluted share.

On that basis, analysts, on average, expected a profit of $1.13 per share, according to Reuters Estimates.

Revenue jumped 39 percent to $3.32 billion.

Backlog for capital equipment orders for the company’s rig technology unit as of June 30 increased 9 percent to $10.8 billion, with record new orders during the quarter of $2.2 billion.

Revenue for the rig technology business, was $1.9 billion, up 36 percent. Operating profit was $506 million, up from $341 million.

Revenue for its petroleum services & supplies business, which now includes Grant Prideco’s products, was $1.12 billion, up sharply from $746 million. Operating profit edged up to $297 million from $293 million.

National Oilwell shares rose 92 cents, or 1.3 percent, to $75.05 on the New York Stock Exchange, outperforming a nearly 2 percent decline in the Philadelphia Stock Exchange index of oilfield service companies .OSX. (Editing by Jeffrey Benkoe)

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