A good time to re-evaluate the company's fundamentals will be the Oct.They pretty much own the offshore oil rig market in consumables and logistics. That market is at 90% capacity and day rates are $180,000 for the deepest of offshore rigs. Servicing that market is very lucrative because many of these rigs are 20 years old or more. NOV is the company they come to to modernize and fix up those aging rigs.
24 third-quarter earnings report. Lehman Brothers analyst Jim Crandell says the
company tends to under promise and over deliver, which it again did when it
posted surprisingly strong orders and backlog last quarter. The backlog then
totaled $7.2 billion, up from $6.4 billion in the first quarter. New orders
received in the quarter hit $1.8 billion, up from $1.2 billion, reflecting
strong demand, especially for international offshore gear. Similar growth in the
third quarter and upbeat guidance could spur further stock gains.
They also sell these companies consumables and other things that they need for everyday functioning. With day rates through the roof you can bet that these rigs go 24/7 and downtime costs big money. So they have pricing power when it comes to the things that that these drillers need. The number I am watching closely is how much their backlog grows in this next quarter. If it keeps getting bigger and bigger you can easily gauge how much they will make in future quarters.
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