* 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 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
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.