Oil drilling equipment maker
Cameron International Corporation
) announced that it has procured a contract from Brazil's
state-run energy giant
Petroleo Brasileiro S.A., or Petrobras
). The contract entails Cameron to provide subsea equipment for
the development of Pre-Salt and Post-Salt areas, located offshore
CAMERON INTL (CAM): Free Stock Analysis
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Cameron shares a long-standing business relationship with
Petrobras and the recent contract win is a part of it. Per the
deal, Cameron will supply 47 subsea trees and related tools.
Cameron expects the deliveries of the subsea equipment to
commence in 2014. The value of the award is estimated at roughly
Earlier in Feb 2013, Cameron signed a deal with an affiliate of
U.S. energy behemoth
) to supply two water injection trees, five subsea production
trees, three manifolds, production and topside controls and
Houston, Texas-based Cameron is a leading manufacturer of
pressure control equipment used in onshore, offshore, and subsea
applications for oil and gas drilling, production, and
transmission. The company operates through three segments:
Drilling & Production Systems, Valves & Measurement, and
Process & Compression Systems.
Cameron's strong backlog provides ample visibility for earnings
growth and cash flow prospects going forward. Its existing
backlog of nearly $7.6 billion provides plenty of cushion amid
the current uncertain environment.
On the flip side, Cameron conducts operations in many
international markets and is therefore exposed to risks
associated with doing business abroad. Such risks include
embargoes and/or expropriation of assets, exchange rate risks,
terrorism and political/civil sentiment, etc.
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 energy explorer like
Range Resources Corporation
) as attractive investment. The firm - sporting a Zacks Rank #1
(Strong Buy) - implies that it is expected to outperform the U.S.
equity market over the next one to three months.