Will National-Oilwell Varco, Inc. (NOV) Earnings Stall Out?

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Yet even with a slight contraction in earnings, Varco’s valuation looks extremely reasonable. Trading at just 13 times this year’s projected earnings, the company would have to see continued weakness in profitability in order to justify such an inexpensive multiple, and conditions in the global energy industry don’t support such negative expectations at this point.

In the National Oilwell Varco earnings report, look to see whether backlogged orders continue to climb and whether the company manages to eke out some operational cost savings. Varco needs to focus on getting its margins up, but with so much experience in the industry, success in doing so could lead to a quick rebound for the stock.

The article Will National Oilwell Varco Earnings Stall Out? originally appeared on Fool.com is written by Dan Caplinger.

Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter @DanCaplinger. The Motley Fool recommends National Oilwell Varco. The Motley Fool owns shares of National Oilwell Varco.

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