Back to top

Analyst Blog

Oil drilling equipment maker Cameron International Corp. (CAM - Analyst Report) reported third quarter earnings per share (excluding special items) of 78 cents, exceeding the 64 cents (adjusted) earned in the prior-year quarter and the Zacks Consensus Estimate of 74 cents. The outperformance reflects robust profitability from its ‘Drilling & Production Systems’ and ‘Valves & Measurement’ segments. 

Quarterly revenue, at $1,685.9 million, was up 10.4% year over year but came below the Zacks Consensus Estimate of $1,795.0 million.

Segment Analysis

Drilling & Production Systems (DPS): Revenues for the DPS segment totaled $977.2 million in the third quarter, up 3.5% from the year-ago quarter, while the DPS segment EBITDA rose 20.2% year over year to $223.1 million. The improved performance came on the back of higher level of subsea sales.

Valves & Measurement (V&M): Quarterly revenues in the V&M segment totaled $434.4 million, up 38.9% year over year. The segment EBITDA increased 69.3% year over year to $91.4 million. The positive comparisons were driven by strong North American business activity levels.

Process & Compression Systems (PCS): Revenues in the PCS segment increased 1.4% year over year to $274.3 million. However, the segment EBITDA witnessed a year-over-year fall of 40.1% to $33.8 million.

Backlog

During the quarter, Cameron received orders totaling $2,003.1 million, up 35.4% year over year, reflecting increases across the DPS and V&M segments. The composition of current order booking is 57% for DPS, 26% for V&M and 17% for PCS.

As of September 30, 2011, total backlog stood at $5,787.5 million, up from the year-earlier level of $4,935.4 million, driven by higher backlog across all segments.

Capital Expenditure & Balance Sheet

During the quarter, Cameron’s capital expenditure amounted to $94.2 million. As of September 30, 2011, cash and cash equivalents stood at $1,536.5 million, while total long-term debt (including the current portion) was $1,587.2 million (with debt-to-capitalization ratio of 25.6%).

Guidance

Management increased its EPS guidance range for fiscal 2011 to $2.63 – $2.66 from the earlier guidance range of $2.55 – $2.65.

Our recommendation

Cameron, which competes with FMC Technologies Inc. (FTI - Analyst Report) and National-Oilwell Varco (NOV - Analyst Report) in the ‘Oilfield Machineries and Equipment’ sector, currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. We are also maintaining our long-term Neutral recommendation on the stock.

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
SYNAPTICS I… SYNA 78.11 +8.14%
GREEN PLAIN… GPRE 39.41 +5.12%
PILGRIM'S P… PPC 28.82 +3.08%
SKYWORKS SO… SWKS 52.07 +2.58%
CLAYTON WIL… CWEI 109.08 +2.51%