Oil drilling equipment maker
Cameron International Corp.
) reported strong third quarter results, driven by higher orders
across the firm's products and markets.
CAMERON INTL (CAM): Free Stock Analysis
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The Houston, Texas-based company came out with earnings per share
- excluding charges associated with integration costs - of 91
cents, beating the Zacks Consensus Estimate by 3 cents. Cameron's
performance also improved from the year-ago adjusted profit of 78
Quarterly revenue, at a record $2,218.3 million, was up 31.6%
year over year and was also above the Zacks Consensus Estimate of
Drilling & Production Systems (DPS):
Revenues for the DPS segment totaled $1,279.7 million in the
third quarter, an increase of 31.0% from the year-ago period,
while the DPS segment EBITDA rose 7.5% year over year to $239.9
million. The improved performance came on the back of higher
level of subsea activity, where it competes with
FMC Technologies Inc.
Valves & Measurement (V&M):
Quarterly revenues in the V&M segment totaled $536.0 million,
up 23.4% year over year. The segment EBITDA increased 26.9% year
over year to $116.0 million. The positive comparisons were driven
by strong infrastructure activity levels throughout the world.
Process & Compression Systems (PCS):
Revenues in the PCS segment jumped 46.8% year over year to $402.6
million. The segment EBITDA witnessed a year-over-year
improvement of 49.7% to $50.6 million, driven by operational
During the quarter, Cameron received orders totaling $2,300.1
million, up 14.8% year over year, reflecting an increase in the
DPS segment. The composition of current order booking is 64% for
DPS, 21% for V&M and 15% for PCS.
As of September 30, 2012, total backlog stood at a record
$7,597.7 million, up from the year-earlier level of $5,787.5
million, driven by sharply higher backlog in the DPS segment.
Capital Expenditure & Balance Sheet
During the quarter, Cameron's capital expenditures amounted to
$98.7 million. As of September 30, 2012, cash and cash
equivalents stood at $990.7 million, while total long-term debt
was $2,017.8 million (with debt-to-capitalization ratio of
Management expects fourth quarter profitability to be in the
range of 95-97 cents per share.
Rating & Recommendation
Cameron currently retains a Zacks #3 Rank (short-term Hold
rating). We are also maintaining our long-term Neutral
recommendation on the stock.