USA: Cameron Reports USD 148 Million Q2 Net Income

Cameron, a leading provider of flow equipment products, systems and services to worldwide oil, gas and process industries reported net income of $148.0 million, or $0.59 per diluted share, for the quarter ended June 30, 2011, compared with net income of $129.2 million, or $0.52 per diluted share, for the second quarter of 2010.

The second quarter 2011 results include pre-tax charges of $20.1 million, or $0.07 per share, primarily related to litigation and restructuring costs. The second quarter 2010 results included pre-tax charges of $18.4 million, or $0.06 per diluted share, related to the continued integration of the NATCO Group Inc. acquisition, as well as litigation and severance costs.

Year-over-year revenues increase in every segment

Revenues were $1.74 billion for the quarter, up 19.9 percent from $1.45 billion a year ago, and income before income taxes was $187.4 million. Cameron Chairman and Chief Executive Officer Jack B. Moore said that the year-over-year revenue increase was due to gains in all three of the Company’s segments, with the Drilling & Production Systems (DPS) and Valves & Measurement (V&M) segments seeing double digit revenue gains. He noted that EBITDA margins were in line with the Company’s expectations for the quarter. “DPS margins sequentially reflected a higher level of subsea revenues which moderated the segment’s overall margins; V&M margins showed a solid recovery year-over-year and sequentially; and margins in the PCS business are up from the first quarter,” Moore said.

Orders increase 72%– quarterly records set for several businesses

Total orders were $2.39 billion for the quarter, up from $1.39 billion in the second quarter of 2010, for an increase of 72%. Moore noted that this was the second highest orders quarter in Cameron’s history. Record bookings were established for the drilling, engineered and process valves and the process businesses. Notable were nine deepwater stack and five jackup awards for the drilling business. Drilling and surface also saw their largest quarterly aftermarket orders in Cameron’s history. Subsea saw its second highest quarterly orders since 2009. The process business also received two large awards for MEG reclamation units to support deepwater developments.

Cameron’s backlog at the end of the second quarter was $5.52 billion, up from the first quarter level of $4.89 billion and up from $4.92 billion a year ago. Moore noted that V&M and PCS increased backlog over the past year with V&M gaining more than 61 percent from year-ago levels, and PCS up 24 percent.

Capital investment continues, balance sheet strong

Cameron’s operations generated cash of $101.4 million during the second quarter. Moore said cash flow from operations should accelerate in the back half of the year as Cameron’s working capital needs moderate. Moore also noted that Cameron spent approximately $134.3 million in capital expenditures in the first half. “We now expect capital spending to approximate $300 million for 2011”, Moore said, “as we focus on investments in our aftermarket and unconventional resource related businesses, as well as our Brazilian capacity expansion”. Moore noted that the Company called its 2.5% convertible debentures during the second quarter and the cash repurchase should be completed during the third quarter. He said that this would result in a 5.2 million share reduction from the first quarter of 2011.

Moore said that as of June 30, 2011, Cameron’s $2.04 billion of cash and cash equivalents exceeded its total debt by approximately $89 million.

Full-year earnings guidance raised

Moore said Cameron’s third quarter earnings are expected to be in the range of $0.70 to $0.75 per share, and the Company anticipates full-year 2011 earnings, excluding charges, will be in the range of $2.55 to $2.65 per share, compared with the previous expectation of $2.50 to $2.60.

Source: Cameron, July 29, 2011;

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