Oil drilling equipment maker Cameron International Corp. ( CAM - Analyst Report ) reported fourth quarter earnings per share – excluding charges – of 95 cents, missing the Zacks Consensus Estimate by a penny. The weaker-than-expected results were mainly due to muted subsea activity.

However, comparing year over year, the Houston-based company’s earnings per share improved by a handsome 23.4% – from 77 cents (adjusted) to 95 cents – on the back of robust drilling and surface systems businesses.

Quarterly revenue, at a record $2,425.8 million, was up 19.5% year over year and was also above the Zacks Consensus Estimate of $2,372.0 million.

Segment Analysis

Drilling & Production Systems (DPS): Revenues for the DPS segment totaled $1,393.7 million in the fourth quarter, an increase of 14.6% from the year-ago period, though the DPS segment EBITDA fell 3.0% year over year to $238.7 million. The slightly lower profitability could be attributed to the lack of any large subsea orders.

Valves & Measurement (V&M): Quarterly revenues in the V&M segment totaled $556.7 million, up 20.4% year over year. The segment EBITDA increased 37.4% year over year to $126.8 million. The positive comparisons were driven by strong infrastructure activity levels throughout the world.

Process & Compression Systems (PCS): Revenues in the PCS segment jumped 34.9% year over year to $475.4 million. The segment EBITDA witnessed a year-over-year improvement of 104.0% to $77.5 million, driven by operational efficiencies.

Backlog

During the quarter, Cameron received orders totaling $3,443.2 million, up 79.8% year over year, reflecting an almost threefold increase in the DPS segment. The composition of current order booking is 74% for DPS, 16% for V&M and 10% for PCS.

As of Dec 31, 2012, total backlog stood at a record $8,597.2 million, up significantly from the year-earlier level of $5,969.1 million, driven by sharply higher backlog in the DPS segment.

Capital Expenditure & Balance Sheet

During the quarter, Cameron’s capital expenditures amounted to $146.9 million. As of Dec 31, 2012, cash and cash equivalents stood at $1,185.8 million, while total long-term debt was $2,047.0 million (with debt-to-capitalization ratio of 26.9%).

Guidance

Management gave its EPS guidance range for 2013 at $3.70–$3.95, while the first quarter profitability is likely to be in the range of 70–75 cents. The current Zacks Consensus Estimate for Cameron’s first quarter is 83 cents per share, while that for the full year is $4.07 per share – both higher than the company guidance.

Stocks to Consider

Cameron currently carries a Zacks Rank #3 (Hold), implying that it is expected to perform in line with the broader U.S. equity market over the next one to three months.

Meanwhile, one can look at Natural Gas Services Group Inc. ( NGS - Snapshot Report ) , Hornbeck Offshore Services Inc. ( HOS - Snapshot Report ) and RPC Inc. ( RES - Snapshot Report ) as attractive investments. These oil services companies – all sporting Zacks Rank #2 (Buy) – offers value and are worth accumulating at current levels.