By Ben Fox Rubin
National Oilwell Varco Inc.'s (NOV) fourth-quarter profit rose a
better-than-expected 16% as the maker of equipment for energy
producers saw all three of its major segments post strong growth,
led by distribution and transmission.
The manufacturer consistently has posted double-digit earnings
increases for more than a year as oil and gas producers boosted
their capital expenditures, often spending heavily on complex
equipment that can extract hard-to-reach reserves through
unconventional means such as hydraulic fracturing and horizontal
drilling.
National Oilwell Varco has sought to continue its strong growth
with its $2.55 billion acquisition plans for peer Robbins &
Myers Inc. (RBN), but U.S. and Canadian antitrust reviews of the
deal were extended in December, pushing back the proposed closing
date.
The deal, first announced in August, was seen as expanding
National Oilwell Varco's offerings of tools, pumps and valves used
in oil production and came amid an acquisition spree that has made
National Oilwell Varco the sector's dominant equipment maker.
National Oilwell posted a profit of $668 million, or $1.56 a
share, up from $574 million, or $1.35 a share, a year earlier.
Excluding transaction charges and a tax benefit, per-share earnings
were $1.49 in the latest period.
Revenue was up 33% to $5.69 billion.
Analysts surveyed by Thomson Reuters had projected a per-share
profit of $1.44 on revenue of $5.3 billion.
Gross margin narrowed to 24.8% from 30.2%.
Revenue in the rig technology segment jumped 25%, while the
petroleum services and supplies unit saw revenue grow 13%. Revenue
from the distribution and transmission segment more than doubled,
mostly due to recent mergers, the company said.
Backlog at the rig-technology business reached $11.86 billion as
of Dec. 31, up from $11.66 billion in the previous quarter. New
orders in the segment, National Oilwell Varco's largest, were $2.42
billion.
Shares closed at $74.14 on Thursday and were inactive premarket.
The stock has risen 1.4% over the past three months.
Write to Ben Fox Rubin at ben.rubin@dowjones.com
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