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* Q1 EPS ex-items $1.44 vs $1.39 avg analyst view
* Company says demand to remain strong through 2012
* Paid $800 mln for Schlumberger distribution unit
* Rig technology business falls short of estimates
* Shares down 1.7 pct
By Braden Reddall
April 25 (Reuters) - National Oilwell Varco Inc, the largest U.S. oilfield equipment maker, posted a higher-than-expected profit and modest growth in its order backlog, but its rig technology business fell short of analyst estimates and its shares retreated slightly.
The highly acquisitive company struck a deal this month to buy Schlumberger's Wilson distribution arm, and Schlumberger disclosed on Wednesday that the sale of the unit, which made $2.1 billion in revenue in 2011, was for $800 million in cash.
NOV's biggest business, supplying technology to rigs, fell short of analysts' estimates in the first quarter.
Pritchard Capital analyst Bill Conroy said the profit beat was driven mainly by lower costs, but that rig technology revenue was $50 million short of his $2.31 billion estimate, while orders fell $300 million short at $1.9 billion.
But NOV is confident that demand from its energy-producing customers will remain strong through 2012, and analysts see it as a good way to invest in the offshore drillers' anticipated continued investment in their fleets.
The Houston-based company is cautiously optimistic that North American onshore liquids drilling will offset the decline in natural gas activity, while the lucrative deepwater drilling market was "blossoming."
Chief Executive Pete Miller said he did not anticipate any major slowdown in the current pace of new offshore rig building as long as oil prices remained well above $75 per barrel.
"It is probably in good shape right now, but if you went below that, you would have to ask some questions," Miller told analysts on a conference call on Wednesday.
First-quarter net profit climbed to $606 million, or $1.42 per share, from $407 million, or 96 cents per share, a year before. Excluding one-time transaction costs, the company said its earnings were $1.44 per share, topping the $1.39 per share that analysts had on average forecast, according to Thomson Reuters I/B/E/S. Revenue increased 37 percent to $4.3 billion.
Its backlog of mostly offshore rig equipment rose 2 percent from the fourth quarter to $10.36 billion.
National Oilwell Varco's shares were down 1.7 percent to $76.68 in Wednesday afternoon trading. They have rallied nearly 15 percent so far this year, double the gain in the Philadelphia Oil Service companies index.