Back to top

Analyst Blog

Oil drilling equipment maker Cameron International Corporation (CAM - Analyst Report) has announced that it has renewed and extended its CAMSERV aftermarket services contract with Petroleo Brasileiro S.A. or Petrobras (PBR - Analyst Report). The original deal was signed in 2007.

Per the agreement, Cameron will render the aftermarket services and support, including inspection, maintenance, repair and remanufacturing, storage and offshore installation for the development of Petrobras’ fields offshore Brazil.

Cameron, which will execute the deal from its upgraded service center in Macae (Brazil), expects to reap more than $150 million in revenue over the next three years.

Headquartered in Houston, Texas, Cameron shares long-standing business ties with the Brazilian state controlled energy giant with the former lending immense support to manufacturing, service and research and development (R&D) projects in that country. Cameron’s association with Petrobras is highlighted through various agreements over the latter’s exploration and production programs.

In mid-January 2011, Cameron received 27 subsea trees and a related equipment supply order worth $74 million from Petrobras, to be used for the development of offshore fields in Brazil. This was followed by Cameron’s plans to invest approximately $30 million in two R&D plants in Brazil and a Memorandum of Understanding with Petrobras in March.

We believe that Cameron has a diversified product portfolio, specialty service capabilities and proprietary technological expertise. Other positives for Cameron include a strong backlog position, growing international operations and a favorable outlook for subsea activity levels.

However, shares of the company are fairly valued at current levels, considering the sensitivity of Cameron’s business to gas/oil price volatility, as well as exploration and production spending patterns, costs, geo-political risks, competition and the advent of new technologies.

Hence, we expect Cameron to perform at par with other industry players and maintain our long-term Neutral recommendation.

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
UNITED THER… UTHR 117.83 +28.51%
TRIQUINT SE… TQNT 20.67 +6.52%
RF MICRO DE… RFMD 12.47 +6.04%
VASCO DATA… VDSI 14.77 +4.68%
BANCO DO BR… BDORY 15.53 +3.95%