Oil drilling equipment maker
Cameron International Corp.
) reported fourth quarter earnings per share - excluding charges
- of 95 cents, missing the Zacks Consensus Estimate by a penny.
The weaker-than-expected results were mainly due to muted subsea
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However, comparing year over year, the Houston-based company's
earnings per share improved by a handsome 23.4% - from 77 cents
(adjusted) to 95 cents - on the back of robust drilling and
surface systems businesses.
Quarterly revenue, at a record $2,425.8 million, was up 19.5%
year over year and was also above the Zacks Consensus Estimate of
Drilling & Production Systems (DPS):
Revenues for the DPS segment totaled $1,393.7 million in the
fourth quarter, an increase of 14.6% from the year-ago period,
though the DPS segment EBITDA fell 3.0% year over year to $238.7
million. The slightly lower profitability could be attributed to
the lack of any large subsea orders.
Valves & Measurement (V&M):
Quarterly revenues in the V&M segment totaled $556.7 million,
up 20.4% year over year. The segment EBITDA increased 37.4% year
over year to $126.8 million. The positive comparisons were driven
by strong infrastructure activity levels throughout the world.
Process & Compression Systems (PCS):
Revenues in the PCS segment jumped 34.9% year over year to $475.4
million. The segment EBITDA witnessed a year-over-year
improvement of 104.0% to $77.5 million, driven by operational
During the quarter, Cameron received orders totaling $3,443.2
million, up 79.8% year over year, reflecting an almost threefold
increase in the DPS segment. The composition of current order
booking is 74% for DPS, 16% for V&M and 10% for PCS.
As of Dec 31, 2012, total backlog stood at a record $8,597.2
million, up significantly from the year-earlier level of $5,969.1
million, driven by sharply higher backlog in the DPS segment.
Capital Expenditure & Balance Sheet
During the quarter, Cameron's capital expenditures amounted to
$146.9 million. As of Dec 31, 2012, cash and cash equivalents
stood at $1,185.8 million, while total long-term debt was
$2,047.0 million (with debt-to-capitalization ratio of 26.9%).
Management gave its EPS guidance range for 2013 at $3.70-$3.95,
while the first quarter profitability is likely to be in the
range of 70-75 cents. The current Zacks Consensus Estimate for
Cameron's first quarter is 83 cents per share, while that for the
full year is $4.07 per share - both higher than the company
Stocks to Consider
Cameron currently carries a Zacks Rank #3 (Hold), implying that
it is expected to perform in line with the broader U.S. equity
market over the next one to three months.
Meanwhile, one can look at
Natural Gas Services Group Inc.
Hornbeck Offshore Services Inc.
) as attractive investments. These oil services companies - all
sporting Zacks Rank #2 (Buy) - offers value and are worth
accumulating at current levels.