Cameron Reports 3Q Earnings in 2011
Cameron reported net income of $164.5 million, or $0.67 per diluted share, for the quarter ended September 30, 2011, compared with net income of $148.7 million, or $0.61 per diluted share, for the third quarter of 2010. The third quarter 2011 results include pre-tax charges of $34.2 million, or $0.11 per share, primarily related to costs associated with retiring the Company's convertible debentures, litigation and mark-to-market losses associated with foreign currency derivatives (see attached reconciliation). The third quarter 2010 results included pre-tax charges of $10.4 million, or $0.03 per diluted share, related to the integration of the NATCO Group Inc. acquisition, as well as litigation and severance costs.
Revenues were $1.69 billion for the quarter, up 10 percent from $1.53 billion a year ago, and income before income taxes was $198.0 million, up seven percent from the $185.1 million a year ago.
Cameron Chairman and Chief Executive Officer Jack B. Moore said that the year-over-year revenue increase was due to gains in the Drilling & Production Systems (DPS) and Valves & Measurement (V&M) segments. He noted that EBITDA margins were up for the Company sequentially. Both the DPS and V&M segments drove these margin improvements.
Total orders were $2.0 billion for the quarter, up from $1.48 billion in the third quarter of 2010, for an increase of 35%.
"We are pleased at the pace of orders for the quarter, particularly with the strength of our shorter cycle businesses," Moore commented, "In fact, this represents our third highest orders quarter in Cameron's history."
Surface systems, Distributed Valves, Process Valves and Measurement had record quarterly orders. Subsea saw a 15% increase sequentially.
Cameron's backlog at the end of the third quarter was $5.79 billion, its second highest quarter-end level in history and up from $4.94 billion a year ago. Moore noted that all three segments increased backlog over the past year with V&M gaining more than 47 percent from year-ago levels.
Capital investment continues, balance sheet strong
Cameron's operations generated cash of $104.9 million during the third quarter. Moore said cash flow from operations should continue to accelerate in the fourth quarter as Cameron's working capital needs moderate. Moore also noted that Cameron spent approximately $228 million in capital expenditures in the first three quarters.
"Depending on the pace of expenditures on several large expansion projects, capital spending should approximate $350 million for 2011," Moore said. "We continue to focus on investments in our aftermarket and unconventional resource related businesses, as well as our Brazilian capacity expansion," Moore added. He also noted that the Company called its 2.5% convertible debentures during the second quarter and the cash repurchase was completed during the third quarter. He said that this resulted in a 5.2 million share reduction from the first quarter of 2011.
Moore said that as of September 30, 2011, Cameron's $1.54 billion of cash and cash equivalents was exceeded by its total debt by approximately $50 million.
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