26 October 2013, News Wires – National Oilwell Varco Inc, the largest U.S. oilfield equipment provider, posted a higher-than-expected quarterly profit as margins in its rig technology business, its largest, rose for the first time this year.
National Oilwell shares rose nearly 4 percent to $82.00 in premarket trading on Friday on the New York Stock Exchange.
Margins at the business, which helps prepare oil and gas wells for production, was hit in previous quarters by a slowdown in North American gas drilling activity due to a weak prices.
Earlier this month Schlumberger Ltd, the world’s largest oilfield services company, said offshore drilling in North America increased.
National Oilwell’s rivals Schlumberger, Baker Hughes Inc and Halliburton Co have reported profits that topped Wall Street estimates mainly helped by strong international drilling activity.
National Oilwell said margins in its rig technology business rose to 21.3 percent in the third quarter from 20.7 percent in the previous quarter. Margins were 23.9 percent a year earlier.
The company said margins and revenue at its other two units, petroleum services & supplies, and distribution & transmission, also rose in the third quarter compared with the second quarter.
Last month, the company said it would spin off its distribution business, which provides maintenance, repair and operating supplies, into a publicly traded company.
National Oilwell’s third-quarter net income rose to $636 million, or $1.49 per share, in the third quarter from $612 million, or $1.43 per share, a year earlier.
Adjusted profit of $1.34 per share was slightly above analysts average estimate, according to Thomson Reuters I/B/E/S.
Revenue rose 2 percent to $5.69 billion. Revenue from its rig technology business rose 12 percent and accounted for half of the revenue in the quarter.