Investopedia: Cameron And National Oilwell Looking For A Busier 2011

While the oil spill in the Gulf of Mexico in the summer of 2010 may have pressed the pause button on offshore energy development for the United States, the rest of the world continues to move forward. That, in turn, means more business opportunities for key equipment suppliers like Cameron (NYSE:CAM) and National Oilwell Varco (NYSE:NOV). With rig construction picking up and major projects about to get underway in Asia, Africa and South America, investors may have reason to expect still more pop in these leading energy service stocks. 

Solid Ends To 2010
Neither Cameron nor National Oilwell capped 2010 with a blowout quarter, but both companies delivered acceptably solid results.

Cameron saw revenue increase 18% on a sequential basis, with the drilling/production and process/compression units leading the way at 25% and 31%, respectively. Margins were not quite as strong, though, and EBITDA increased 9% on a sequential basis. Integration expenses related to a merger and legal costs related to the Deepwater Horizon hit margins this quarter, but it does not look like there is any structural problem with the company's business.

For National Oilwell, this quarter was more sedate. Revenue climbed 5% from the third quarter, led by the Rig Technology group's 6% sequential growth. Profitability was also better on a relative basis, as NOV saw EBITDA rise 4% and operating income rise 5% from the third quarter. If investors want to get really picky, it is true that NOV saw about 20 basis points of margin shrinkage. (For more, see Zooming In On Operating Income.)

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