National Oilwell Varco Sinks From Year-to-Date High

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National Oilwell Varco Inc. (NYSE: NOV) tumbled Friday morning from a year-to-date high on Thursday on a narrow miss in first-quarter results. But the company cited rising domestic and international demand, so the pullback could offer an entry point for investors.

The oilfield equipment and services provider posted adjusted diluted earnings per share (EPS) of $1.37 on revenues of $5.78 billion. In the same period a year ago, the company reported adjusted EPS of $1.29 on revenues of $5.31 billion. First-quarter results also compare to the Thomson Reuters consensus estimates for EPS of $1.38 and $5.80 billion in revenues.

The company’s CEO said:

We are pleased with our solid start to the new year, as the Company’s investments in new technologies, manufacturing capacity and strategic acquisitions drove year-over-year revenue and earnings growth. … We are encouraged to see domestic land drilling and well service firms increasing activity, which is leading to increased demand for drilling and stimulation equipment to develop unconventional shales. Outside of the U.S., our investments in Latin America, Africa, the Middle East and Asia have laid a great foundation for continued growth.

Backlog for capital equipment orders for the company’s Rig Technology at the end of the period was a record of $16.35 billion, up 27% from the first quarter of 2013. And new orders during the quarter reached $2.33 billion.

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The company did not provide specific guidance, but the consensus forecast of analysts calls for EPS of $6.14 on revenues of $24.36 billion for the year. For the second quarter, analysts estimate EPS at $1.47 on $6.00 billion in revenue.

National Oilwell Varco shares were down 6.5% in late morning trading Monday, at $78.05 in a 52-week range of $63.25 to $84.71. Thomson Reuters has a consensus analyst price target of about $89.58.

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