Oil drilling equipment maker
Cameron International Corp.
(
CAM
) reported first quarter earnings per share of 54 cents, missing
the Zacks Consensus Estimate by a penny. The weaker-than-expected
results were mainly due to tepid performance from the company's
'Process & Compression Systems' unit.
However, compared with the year-ago period, Cameron's earnings
per share improved by a handsome 17.4% - from 46 cents (adjusted)
to 54 cents - on the back of robust profitability from its
'Drilling & Production Systems' and 'Valves & Measurement'
segments. The first quarter 2011 results have been adjusted for
charges associated with the Deepwater Horizon incident.
Quarterly revenue, at $1,804.3 million, was up 20.2% year over
year but was marginally below the Zacks Consensus Estimate of
$1,806.0 million.
Segment Analysis
Drilling & Production Systems (
DPS
):
Revenues for the DPS segment totaled $1,042.1 million in the first
quarter, up 20.4% from the year-ago quarter, while the DPS segment
EBITDA rose 20.7% year over year to $169.7 million. The improved
performance came on the back of higher level of subsea activity,
where it competes with
FMC Technologies Inc.
(
FTI
).
Valves & Measurement (V&M):
Quarterly revenues in the V&M segment totaled $491.2 million,
up 44.5% year over year. The segment EBITDA increased 57.6% year
over year to $102.9 million. The positive comparisons were driven
by strong infrastructure activity levels throughout the world.
Process & Compression Systems (
PCS
):
Revenues in the PCS segment decreased 8.4% year over year to $271.0
million. The segment EBITDA witnessed a year-over-year fall of
49.0% to $19.8 million, hamstrung by weak pricing and operational
inefficiencies.
Backlog
During the quarter, Cameron received orders totaling $2,569.5
million, up 68.8% year over year, reflecting increases across all
the segments. The composition of current order booking is 66% for
DPS, 20% for V&M and 14% for PCS.
As of March 31, 2012, total backlog stood at $6,766.5 million,
up from the year-earlier level of $4,892.7 million, driven by
higher backlog across all segments.
Capital Expenditure & Balance Sheet
During the quarter, Cameron's capital expenditures amounted to
$86.7 million. As of March 31, 2012, cash and cash equivalents
stood at $662.5 million, while total long-term debt (including the
current portion) was $1,607.7 million (with debt-to-capitalization
ratio of 24.7%).
Guidance
Management reiterated its EPS guidance range for fiscal 2012 at
$3.20-$3.30, while the second quarter profitability is likely to be
in the range of 70-75 cents.
Rating & Recommendation
Cameron is currently a Zacks #3 Rank (Hold) stock, implying that
it is expected to perform in line with the broader U.S. equity
market over the next one to three months. We are also maintaining
our long-term Neutral recommendation on the stock.
CAMERON INTL (
CAM
): Free Stock Analysis Report
FMC TECH INC (
FTI
): Free Stock Analysis Report
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