National Oilwell Varco, the largest U.S.-based supplier of drilling equipment, said its fourth-quarter profit rose 12% and the Houston-based company offered up a bullish outlook for 2011 on the back of increased activity in North American shale plays and an expected uptick in offshore drilling.
National Oilwell (NOV) said it earned $440 million, or $1.05 a share, in the fourth quarter, compared with $394 million, or 94 cents a share a year earlier. Revenue rose to $3.17 billion, while gross margin widened to 31.5% from 31.3%, the Wall Street Journal reported. Analysts were expecting a profit of 96 cents a share.
The company said that it believes the same technology and equipment it provides to producers operating in North American shale plays will see increased demand in international locations. Beyond Poland and Argentina, where shale exploration is under way, National Oilwell has seen a rise in equipment orders from China in recent weeks, the Journal reported, citing the company.
Backlog for National Oilwell's rig technology business increased 3% to $5.01 billion and that business could grow even more this year as new rigs come online. The company said it expects a brisk pace of orders in the current quarter.