A
solid quarter from
National Oilwell Varco (NOV) - slight beat on it's numbers. Right now I've pulled back from the oil service area - one issue is a "worldwide slowdown" scenario could push oil prices into upper $70s to mid $80s, and in the very short sighted manner of investors - they tend to push down the value of all companies across the food chain along with crude prices. Even though some subsectors such as deep sea oil drilling won't be affected if crude is $65, $85, or $105. Further those companies heavily weighted to the US are showing weakness, but even the companies with little US exposure get sold off in sympathy. So yet again another case of 'perception is reality'. NOV just continues to perform very well operationally, but I did cut the position weighting back lately [
US Markets Continue to Ravage Oil Service Stocks], based on how so many other oil service names have been getting trounced - the risk/reward in this part of the market is just not in our favor right now.
- National Oilwell Varco Inc (NOV) said on Wednesday fourth-quarter profit rose 57 percent as high energy prices lifted demand for its drilling equipment and services.
- Net income increased to $376.7 million, or $1.05 per diluted share, from $239.2 million, or 68 cents per diluted share in the same period a year earlier. Analysts on average had expected a profit of $1.04 a share, according to Reuters Estimates.
- Revenue rose to $2.66 billion from $2.08 billion a year earlier.
- Fourth-quarter revenue for the Houston company's rig technology unit rose 40 percent from a year ago to $1.59 billion, while operating profit was $410.5 million, up sharply from $225.5 million a year ago.
- Backlog for capital equipment orders for the company's rig technology segment at the end of 2007 increased to a $9 billion, compared to $8 billion at the end of the third quarter.
- New orders during the fourth- quarter were a record $2.2 billion.
So we continue to see backlog growth and continued record new orders... but the market could care less right now. After all crude is down from mid $90s to upper $80s, therefore all these stocks must be sold... (that's the logic)
Long National Oilwell Varco in fund; no personal position
