NOV 2Q net income at $619 million

National Oilwell Varco, Inc. today reported that for its second quarter ended June 30, 2014, it earned net income of $619 million, or $1.44 per fully diluted share, compared to first quarter ended March 31, 2014 net income of $589 million, or $1.37 per fully diluted share.

The second quarter 2014 fully diluted earnings per share includes: $0.02 per share for income from discontinued operations, ($0.05) per share for nonrecurring items and ($0.14) per share for the amortization of intangible assets. The first quarter of 2014 fully diluted earnings per share includes: $0.09 per share for income from discontinued operations, ($0.01) per share for nonrecurring items and ($0.14) per share for the amortization of intangible assets. Excluding these items, operating (non-GAAP) earnings per fully diluted share for the second quarter of 2014 were $1.61 per share, compared to $1.43 per share in the first quarter of 2014, an increase of 13 percent.

As previously announced, on May 30, 2014, the Company completed the spin-off to its stockholders of its distribution business as an independent public company, NOW Inc. These results are presented as discontinued operations. This also marks the first quarter in which the Company has issued financial results based on its four new reporting segments.

Revenues for the second quarter of 2014 were $5.26 billion, an increase of seven percent from the first quarter of 2014 and an increase of 12 percent from the second quarter of 2013. Operating profit for the quarter, excluding non-recurring items, was $945 million, or 18.0 percent of sales. EBITDA for the quarter, excluding non-recurring items, was $1.14 billion, or 21.7 percent of sales, up 12 percent from the prior quarter.

Ending backlog for the second quarter of 2014 was $15.39 billion for the Company’s Rig Systems segment and $2.14 billion for the Company’s Completion & Production Solutions segment.

Clay Williams, Chairman, President and CEO of National Oilwell Varco, stated, “The second quarter of 2014 was a historic quarter for NOV. In addition to posting strong operating results, and securing $3.4 billion in new capital equipment orders, we are very pleased to have created additional shareholder value by both successfully completing the spin-off of our distribution business, and increasing our regular dividend by over 75 percent. As we move through the second half of 2014, we look forward to continued demand for our drilling, completion and production equipment, and continued strong results from our four new segments.”

Rig Systems

Second quarter revenues for the Rig Systems segment were $2.37 billion, an increase of five percent from the first quarter of 2014 and an increase of 14.0 percent from the second quarter of 2013. Operating profit for this segment was $501 million, or 21.1 percent of sales. EBITDA for this segment was $523 million, or 22.0 percent of sales. Revenue out of backlog for the segment was at $2.07 billion.

Backlog for capital equipment orders for the Company’s Rig Systems segment at June 30, 2014 was $15.39 billion, up one percent from the first quarter of 2014, and up 20.0 percent from the end of the second quarter of 2013. New orders during the quarter were $2.28 billion, reflecting continued strong demand for oilfield equipment.

Rig Aftermarket

Second quarter revenues for the Rig Aftermarket segment were $785 million, an increase of five percent from the first quarter of 2014 and an increase of 17.0 percent from the second quarter of 2013. Operating profit for this segment was $217 million, or 27.6 percent of sales. EBITDA for this segment was $224 million, or 28.5 percent of sales.

Wellbore Technologies

Revenues for the second quarter of the Wellbore Technologies segment were $1.45 billion, an increase of 13.0 percent from the first quarter of 2014 and an increase of 18.0 percent from the second quarter of 2013. Operating profit for this segment was $269 million, or 18.6 percent of sales. EBITDA for this segment was $377 million, or 26.1 percent of sales.

Completion & Production Solutions

The Completion & Production Solutions segment generated revenues of $1.13 billion, an increase of 12.0 percent from the first quarter of 2014 and an increase of seven percent from the second quarter of 2013. Operating profit for this segment was $158 million, or 14.0 percent of sales. EBITDA for this segment was $211 million, or 18.7 percent of sales.

Backlog for capital equipment orders for the Company’s Completion & Production Solutions segment at June 30, 2014 was $2.14 billion, up 32.0 percent from the first quarter of 2014, and up 44.0 percent from the end of the second quarter of 2013. New orders during the quarter were $1.12 billion.

 

Press Release, July 29, 2014

 

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