Cooper Cameron Second Quarter Earnings Per Share $0.70
Cooper Cameron Corporation
|Thursday, July 21, 2005
Cooper Cameron Corporation (NYSE: CAM) reported net income of $38.6 million, or $0.70 per diluted share, for the quarter ended June 30, 2005. This compares with net income of $18.7 million, or $0.35 per diluted share, for the second quarter of 2004, which included a non-cash after-tax write-off of debt issuance costs of $4.6 million, or $0.09 per diluted share. Total revenues were $594.7 million for the quarter, up nine percent from 2004's $544.6 million, while income before income taxes was $57.5 million, up nearly 107 percent from $27.8 million a year ago.
Year-over-year revenue increase fueled by CCV, Compression
Cooper Cameron Chairman, President and Chief Executive Officer Sheldon R. Erikson said that strong revenue gains in Cooper Cameron's shorter-cycle businesses -- Cooper Cameron Valves (CCV), Cooper Compression and Cameron's surface equipment -- drove the year-over-year and sequential increase in revenues. "Increased shipments at CCV and Compression allowed us to record the Company's highest consolidated quarterly revenues in our history," Erikson said.
Free cash flow generation ahead of year-ago pace
Erikson said that the Company has generated nearly $156 million of free cash flow (net cash provided by operating activities less capital expenditures) during the first half of 2005, compared with approximately $45 million in the first half of 2004. "Our capital spending programs provide for significant reinvestment in, and upgrades to, our existing facilities," he said. "Our challenge is to effectively redeploy the cash we generate above and beyond those needs toward profitable acquisitions or additional repurchases of our common stock."
Cameron revenues up sequentially, expected to increase in second half
Erikson noted that Cameron's revenues were up sequentially, but were down from the second quarter of 2004, when Cameron's results included a significant amount of subsea systems shipments with substantial pass-through revenues. "While revenues were lower than a year ago," Erikson said, "Cameron's product mix and the impact of price increases generated higher margins and more operating profit on a year-over-year basis. We do expect that Cameron's second-half revenues will exceed those of the second half of 2004, and that margins will continue to improve in comparison with year-ago levels."
CCV revenue gains reflect acquisitions, market activity
CCV's revenues, aided by recent acquisitions, were up both sequentially and year-over-year, reaching the highest quarterly total in its history. Erikson said the integration of the late 2004 acquisition is essentially complete, and the recent acquisition of NuFlo Technologies is contributing to revenues and profitability as expected. "Strength in the North American rig count and international pipeline markets should allow CCV to continue its solid revenues and earnings performance," he said.
Cooper Compression benefiting from recent strong bookings
Cooper Compression's revenues were up significantly on both a sequential and year-over-year basis as a recent upswing in orders is being converted into deliveries. "Compression's first quarter revenues and earnings were relatively soft," Erikson said, "but we expect their recent record backlog to generate increased revenues and profitability in the next couple of quarters."
Major subsea systems project, overall market activity generate record orders
Orders received during the second quarter of 2005 totaled $1.1 billion, up 125 percent from year-ago levels. Erikson noted that the second quarter increase reflected $350 million of the $415 million order from Total for the Akpo project in Nigeria. "Excluding the Akpo award, orders for the quarter increased 54 percent from a year ago and 11 percent sequentially," Erikson said. "During the second quarter, we received more than $1 billion in orders for the first time in our history, on top of posting record orders in the first quarter of 2005. The combination of the Akpo project booking and continuing strength across our product lines brings our year-to-date orders for all of Cooper Cameron to approximately $1.8 billion, up more than 96 percent from a year ago." At June 30, 2005, total backlog was $1.62 billion, up from the prior quarter's record of $1.13 billion and the June 30, 2004 level of $955 million.
Balance sheet remains solid
At June 30, 2005, Cooper Cameron's total debt was $449.4 million, and cash and cash equivalents were $308.5 million, resulting in net debt of $140.9 million and a net debt-to-capitalization ratio of approximately nine percent.
Earnings expectations raised
Erikson said that Cooper Cameron's third quarter earnings are expected to increase to approximately $0.75 to $0.80 per share. He also noted that full- year earnings are expected to be approximately $2.75 to $2.85 per share, up from the Company's earlier guidance of $2.45 to $2.60.