Moody's Upgrades Outlook For National Oilwell Varco

By Houston Business Journal

Moodyâ¿¿s Investors Service said Monday it has upgraded its ratings outlook for National Oilwell Varco Inc. (NYSE: NOV) from stable to positive.

The company has shown strong growth in equipment orders related to the expansion of global offshore and onshore drilling fleets, and Moodyâ¿¿s said Houston-based National Oilwell will likely experience additional earnings increases and margin expansion in 2012.

Moodyâ¿¿s also affirmed the Houston oilfield equipment companyâ¿¿s A3 senior unsecured debt rating, which is an upper-medium grade subject to low credit risk. Moodyâ¿¿s said the rating is based on NOVâ¿¿s leading market position in most of key equipment categories that service oilfields, its global diversification and low debt levels; the companyâ¿¿s low levels of debt and ample cash balances mitigate the cyclical nature of oil and gas prices.

NOV could attain an upgrade to A2 on its debt rating in 2012 if the companyâ¿¿s backlog and profit margins increase as expected, and it manages to internally fund strategic acquisitions, the investment firm said in a statement.

Copyright 2011 American City Business Journals

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