Cameron Income Rises. Orders Up 41% (USA)

Cameron, a U.S. based provider of flow equipment products, systems and services to worldwide oil, gas and process industries, reported earnings per share for the first quarter of 2013 of $0.70 excluding charges.

This compares to earnings per share for the first quarter of 2012 of $0.54 excluding charges. This represented a thirty percent increase in earnings per share excluding charges compared to first quarter 2012. After-tax charges for the first quarter of 2013 were $0.10 per share primarily related to the formation of the OneSubsea joint venture and the devaluation of the Venezuelan bolivar.

The Company reported GAAP net income of $148.3 million for the first quarter of 2013, or $0.60 per diluted share. This compares with GAAP net income of $134.0 million for the first quarter of 2012, or $0.54 per diluted share.

Year-over-year revenues increase

Revenues were $2.1 billion for the quarter, up 17 percent from $1.8 billion a year ago. Cameron Chairman, President 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 major business segments. Further, Moore commented, “While we saw year-over-year revenue increases in our PCS segment, the weak activity in North America muted these increases substantially. However, our Surface business experienced an increase in North American revenues due to share expansion despite the weak activity levels.”

Record orders and backlog include large Brazil and West African subsea tree orders

Total orders for the quarter were a record $3.6 billion, up from $2.6 billion in the first quarter of 2012, for a 41 percent year-over-year increase. Moore noted that each of the three major business segments surpassed 2012 order levels, with the DPS segment enjoying the largest percentage increase of 62 percent. Two large awards were received in the subsea business within DPS, one in Brazil and the other Nigeria, which helped establish the quarterly records for the Subsea Systems business, the DPS business segment and Cameron. Moore noted that the subsea business and Cameron are poised for a record year in new orders in 2013. The Surface Systems business within DPS also saw a record order level for the quarter including another strong quarter of North American and Middle Eastern orders.

Cameron’s backlog at the end of the first quarter was $10.0 billion, its highest historical level. This was up from the prior year level of $6.8 billion, and the beginning of the year level of $8.6 billion. Moore noted, “Each of our DPS businesses are at all time record backlogs while the Company’s overall record backlog is up 48 percent from last year.”

Capital investment continues

Cameron’s operations utilized cash of $22.7 million during the first quarter of 2013 compared with a cash use of $203.8 million a year ago. Moore said that the Company’s cash uses typically exceed cash inflows during the first quarter of the year, and that he expects Cameron to generate meaningful cash flow from operations for the full year. He also noted that capital spending is still expected to total approximately $500 million, up from $427.2 million in 2012, reflecting multiple opportunities for deployment of capital, including enhanced exposure to North American resource plays and expansion of facilities and investment in the drilling and valves businesses. The Company also acquired 613 thousand of its shares during the first quarter.

Full year earnings guidance revised, reflecting the estimated earnings impact of the OneSubsea joint venture formation

Moore said that Cameron’s second quarter earnings are expected to be in the range of $0.75 to $0.80 per diluted share excluding charges, and that the Company anticipates that full-year 2013 earnings are expected to be in the range of $3.50 to $3.70 per share excluding charges but including the estimated dilutive impact of the OneSubsea joint venture formation.

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Press Release, April 26, 2013