In addition to reported results, National Oilwell Varco is also providing supplemental results, which comprises of the combined financial results for the company and Grant Prideco as if the April 21, 2008 acquisition took place at the beginning of previous year. The National Oilwell Varco’s operating profit for the first quarter of 2009 was $720 million. Operating profit flow-through, or the change in operating profit divided by the change in revenue, was up 17% from the year-ago quarter to the first quarter of 2009, on a combined basis, and down 48% from the fourth quarter of 2008 to the first quarter of 2009.
New capital equipment orders during the quarter were $240 million, net of orders removed from backlog of $32 million. Backlog for capital equipment orders for National Oilwell Varco rig technology segment was $9.6 billion at March 31, 2009 compared with $11.1 billion at December 31, 2008.
Pete Miller, chairman, president and chief executive officer of National Oilwell Varco, remarked, “Our solid backlog for drilling equipment enabled our Company to generate strong earnings in the first quarter, despite a sharp downturn in drilling activity and available credit to our customers. Though the pace of new capital equipment orders has slowed in the short run, we believe investment in drilling equipment will resume, enabling the industry to explore new oil and gas frontiers. Nevertheless market conditions remain very challenging, and the timing of a recovery is uncertain. We are well positioned for this market, given our strong financial resources, high cash flow, and exceptional backlog through 2010. We plan to execute strategic opportunities arising from the current downturn, both internal and external, to further enhance our business.”
Rig Technology
First quarter revenues for the rig technology segment were $2,199 million, a raise of 5% over the fourth quarter of 2008 and an increase of 37% from the year-ago quarter. Operating profit for this segment was $606 million, or 27.6% of sales. Operating profit flow-through was up 44% from the fourth quarter of 2008 to the first quarter of 2009, and was increased to 34% from the first quarter of 2008 to the first quarter of 2009. Revenue out of backlog for the segment raised 15% consecutively and rose 49% year-over-year, to $1,688 million for the first quarter of 2009. Non-backlog revenue declined 18% successively, and increased 8% from the first quarter of 2008.
Petroleum Services & Supplies
Revenues for the first quarter of 2009 for the petroleum services & supplies segment were $1,014 million, down 27% compared to fourth quarter 2008 results and decreased to 23% in the year-ago quarter, on an adjusted combined basis for the merger. Operating profit was $164 million, or 16.2% of revenue, a decline of 52% from the fourth quarter of 2008. Operating profit flow-through was down 47% consecutively and down 50% from the previous year, on an adjusted combined basis for the merger.
Distribution Services
The distribution services segment generated first quarter revenues of $408 million, which were decreased by 16% from the fourth quarter of 2008 and represented an 11% raise from year-ago quarter. First quarter operating profit was $25 million or 6.1% of sales. Operating profit flow-through from the first quarter of 2008 to the first quarter of 2009 was up 14%. Operating profit flow-through was down 24% from the fourth quarter of 2008 to the first quarter of 2009.
