Cameron: Increased Backlog Driven by Subsea Orders in 3Q
Cameron reported net income of $124.9 million, or $0.56 per diluted share, for the quarter ended September 30, 2009, compared with net income of $163.0 million, or $0.71 per diluted share, for the third quarter of 2008. The third quarter 2009 results include a pretax charge of $5.9 million, or $0.02 per share, for severance-related costs.
Total revenues were $1,231.8 million for the quarter, down 18 percent from 2008's $1,504.7 million, while income before income taxes was $168.6 million, down 30 percent from the $242.2 million of a year ago.
Cameron President and Chief Executive Officer Jack B. Moore said, "The results reflect a continued focus on exceptional execution by our team in a difficult market." Moore also noted that margins held up well during the quarter.
Orders in subsea business drive increase in backlog
Orders received during the third quarter of 2009 totaled $1,343.0 million, up from the levels of the first two quarters of 2009. "Drilling & Production Systems' orders benefited from the bookings associated with a multi-year frame agreement for subsea equipment offshore Brazil," Moore said, "as well as a significant order for multiphase pumping systems booked by Petreco, Cameron's process systems business." He also noted that orders in Valves & Measurement and Compression Systems reached their highest quarterly totals to date during 2009; as a result, Cameron's total orders exceeded revenues during the quarter for the first time since the third quarter of 2008, driving an increase in the Company's total backlog.
At September 30, 2009, Cameron's backlog totaled $5.12 billion, up from the $5.02 billion level at the end of the second quarter.
Cash flow supporting reinvestment in business
Moore said that Cameron's cash flow from operations totaled $184.1 million through the first nine months of 2009. "Year-to-date capital expenditures total $163.7 million, compared with $160.4 million for the 2008 period, and our current estimate for full-year spending is about $240 million," he noted. "We have spent approximately $60 million so far this year on our new Romanian surface equipment plant, which opened in early October and is ramping up its manufacturing capabilities, and on the continuing expansion of our subsea facility in Malaysia."
Moore said that Cameron's financial position remains solid. "At September 30, 2009, the cash and cash equivalents on our balance sheet totaled $1.53 billion, and exceeded our total debt by approximately $237 million," he said. "We continue to evaluate possible acquisition opportunities, and we expect to resume our share repurchase program once the restrictions associated with the pending NATCO acquisition are lifted."
NATCO transaction expected to close during fourth quarter
Cameron expects to close the acquisition of NATCO Group Inc. during the fourth quarter of 2009, subject to the resolution of remaining antitrust issues and approval by NATCO's stockholders. Moore said that the related Registration Statement on Form S-4 was declared effective on October 16, NATCO's Proxy Statement was mailed to its stockholders beginning October 19, and that NATCO's stockholders are expected to approve the transaction at a November 18 special meeting. "We expect to be in a position to close the acquisition once the stockholder approval is confirmed, perhaps as soon as the day of the special meeting," Moore noted. "We look forward to completing the closing process and moving ahead with the integration of NATCO's people and businesses with those of Cameron."
Full-year earnings per share expected to be $2.26 to $2.30
"Cameron's full-year earnings, excluding any charges or gains, are expected to be in the range of approximately $2.26 to $2.30 per share," Moore said. "As always, the results will depend on such factors as customers' spending, our project execution and effective cost management." Moore noted that this guidance does not include any impact from the pending NATCO acquisition.
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