Cooper Cameron Fourth Quarter Earnings Total $0.54 Per Share

Cooper Cameron

Cooper Cameron Corporation (NYSE: CAM) reported net income of $28.9 million, or $0.54 per diluted share, for the quarter ended December 31, 2004, compared with net income in the prior year's fourth quarter of $4.1 million, or $0.07 per diluted share. Revenues for the fourth quarter of 2004 were $547.2 million, up slightly from the third quarter of this year, and more than 23 percent above fourth quarter 2003's $443.2 million, with all three business segments contributing to the revenue increase. Revenues for the year were $2.09 billion, up approximately 28 percent from 2003's $1.63 billion, with increases in all three segments. Net income for the year ended December 31, 2004 was $94.4 million, or $1.75 per diluted share, including a non-cash after-tax write-off of debt issuance costs of $4.6 million, or $0.09 per diluted share and $2.7 million, or $0.05 per diluted share, for the write-down of a technology investment. This compares with 2003 net income of $69.4 million, or $1.25 per diluted share, which included after-tax income of $12.2 million, or $0.21 per diluted share, related to the cumulative effect of adopting a newly issued accounting standard.

Cameron shows favorable comparisons to year-ago results
Cooper Cameron Chairman, President and Chief Executive Officer Sheldon R. Erikson said that Cameron's higher revenues in the quarter, compared with the fourth quarter of 2003, primarily reflect the early 2004 acquisition of Petreco and increased activity in Cameron's surface and subsea businesses. "Better performance in subsea, the addition of Petreco and solid results in our surface product lines all contributed to the division's improved revenues and profits," Erikson said. He also noted that Cameron's sequential revenues were down slightly from the third quarter due to declines in subsea deliveries and in Petreco's revenues.

Cooper Cameron Valves (CCV) posts higher revenues
CCV's revenues were up strongly from a year ago and sequentially, but profitability declined somewhat from the third quarter as a result of higher manufacturing costs (principally higher raw material costs) and severance charges. "Revenues in all product lines increased from year-ago levels as continued strength in the rig count and pipeline markets have positively impacted CCV's business," Erikson said.

Cooper Compression helped by strong international air compression market
Cooper Compression's profits were also higher on both a year-over-year and sequential basis, as revenues for new compression equipment posted solid gains as a result of strong international demand. Orders were up for the quarter and full year compared with 2003.

Orders, year-end backlog reach record levels
Orders booked during the fourth quarter of 2004 totaled $639 million, up more than 58 percent from a year ago, as orders for each of the Company's three divisions were higher than in the fourth quarter of 2003. The fourth quarter orders, aided by the booking of a significant subsea systems project in the Gulf of Mexico, were the highest for a single quarter in the Company's history.

Total orders for the year 2004 were $2.01 billion, up 15 percent from 2003's $1.75 billion. Erikson noted that Cameron's $1.27 billion and CCV's $366 million were records for total orders in those divisions, and helped drive year-end backlog to a new high.

At year-end 2004, total backlog was $1.00 billion, up nearly six percent from the $947 million of a year ago. Both Cameron and CCV backlogs, as well as the Company's consolidated backlog, are at the highest year-end levels in their history.

Financial condition remains solid, stock repurchased during quarter
"Our debt, net of cash and short-term investments, at year-end was $239 million, and the ratio of this net debt to capitalization increased from 12.0 percent at year-end 2003 to 16.3 percent at year-end 2004," Erikson said.

He noted that the increase was due primarily to $171 million used for acquisitions made during the year. Erikson also said that capital expenditures during the year totaled $54 million, down from $65 million in 2003, excluding acquisitions. Capital expenditures during 2005 are expected to be approximately $70 to $80 million, including capital related to expansion efforts at Cameron's Berwick, Louisiana facility to support expected increases in subsea activity and additional investment in several recently acquired valve manufacturing facilities. Erikson also noted that Cooper Cameron repurchased approximately 250,000 shares of its common stock during the quarter at an average price of approximately $50.47, bringing total share repurchases for the year to 1.96 million shares for a total of $95.3 million.

Earnings expectations for 2005 subject to various factors
Erikson said the Company currently expects 2005 earnings to be approximately $2.20 to $2.35 per diluted share, including charges of approximately $0.13 per share for equity- and option-based compensation. "Our 2005 results will depend on a variety of factors, including global rig count, successful integration of our recent acquisitions and the size and timing of short-cycle business in both the surface and subsea segments of Cameron," Erikson said.

Erikson also noted that Cooper Cameron's first quarter results are expected to be down sequentially from the fourth quarter, as has historically been the case. "We expect first quarter earnings per share to be approximately $0.35 to $0.40," he said. "The actual results will be dependent to some extent on our progress in integrating the manufacturing facilities acquired in late 2004 into both CCV and Cameron's operations."

Cooper Cameron Corporation is a leading international manufacturer of oil and gas pressure control equipment, including valves, wellheads, controls, chokes, blowout preventers and assembled systems for oil and gas drilling, production and transmission used in onshore, offshore and subsea applications, and provides oil and gas separation equipment. Cooper Cameron is also a leading manufacturer of centrifugal air compressors, integral and separable gas compressors and turbochargers.


Most Popular Articles