Cameron 3Q Net Jumps 36% on Strong Revenue, Lower Charges

Cameron International Corp.'s third-quarter earnings jumped 36% as the oil-and-gas equipment maker recorded double-digit revenue gains across all its segments and benefited from a comparison with a year-earlier period bogged down by charges.

Results beat expectations.

For the fourth quarter, Cameron projected earnings between 95 cents to 97 cents a share, excluding charges, while analysts polled by Thomson Reuters estimated $1.08 a share.

"While overall market growth in North America is under pressure, the company's outlook for the fourth quarter is robust, with visibility to orders in the international and deepwater markets," Chief Executive Jack B. Moore said. "Additionally, we continue to gain share in our surface North America market."

The company, which makes pressure-control equipment for the energy sector has seen its revenue steadily grow for more than two years as recovering oil-and-gas demand boosts its sales of rig equipment. Earnings have also mostly improved.

For the latest period, Cameron posted a profit of $223.6 million, or 90 cents a share, versus $164.5 million, or 67 cents a share, a year earlier. Excluding one-time items, earnings were 91 cents versus 78 cents a share. In July, the company predicted 87 cents to 90 cents a share.

The latest period included $3.4 million in pretax charges, primarily related to integration costs. The year-earlier period included $34.2 million in charges, which were related to retiring the company's convertible debentures, litigation, and mark-to-market losses associated with foreign currency derivatives.

Revenue increased 32% to $2.22 billion. Analyst surveyed by Thomson Reuters expected $2.19 billion.

However, gross margin narrowed to 29.3% from 32.6% as input costs climbed 38%.

Drilling and production revenue--the biggest segment by sales--was up 31%, while valves and measurement revenue jumped 23%. Revenue from the smaller segment for process and compression systems was up 47%.

Cameron reported orders were up 15% to $2.3 billion. Meanwhile, Cameron's backlog at the end of the third quarter was a record $7.6 billion, up from $5.8 billion a year earlier.

Shares closed Friday at $51.24 and were inactive in recent premarket trading. The stock has risen 4.3% in the past 12 months.


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