Cameron 1Q Profit Up 22% On Valve Sales Growth; 2Q Cautious
04/26/2012| 09:03am US/Eastern
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Cameron International Corp.'s (>> Cameron International Corporation) first-quarter profit rose 22% on surging sales from the oil-and-gas equipment maker's valves and measurement business.
The company also projected a cautious current-quarter profit between 70 cents and 75 cents a share, falling short of analysts' average 79-cent estimate, according to a poll by Thomson Reuters.
Cameron's revenue has steadily grown for more than two years as recovering oil-and-gas demand boosts its sales of rig equipment. Earnings have also improved, though the company booked a steep charge in the fourth quarter due to litigation costs stemming from the 2010 Deepwater Horizon disaster.
The company recently inked a $270 million cash deal to acquire TTS Group ASA's (TTS.OS) TTS Energy Division business, a provider of drilling equipment and rig technology, in a bid to further capitalize on growing oil and natural-gas exploration activity in North America.
Cameron posted a profit of $134 million, or 54 cents a share, up from $109.5 million, or 43 cents a share, a year earlier. Year-ago results included a 3-cent per-share charge for Deepwater Horizon litigation costs. The company in February forecast a profit between 50 cents and 55 cents a share.
Revenue jumped 20% to $1.8 billion, in line with Wall Street's estimate.
Gross margin narrowed to 29% from 29.5%.
Cameron's drilling and production business, its largest segment by revenue, generated 20% more revenue, while its valves and measurement segment posted a 45% jump.
Total orders rose to $2.57 billion from $1.52 billion a year ago. Backlog climbed to $6.77 billion, up from $4.89 billion a year ago and $5.97 billion at the end of December.
Shares closed at $49.25 Wednesday and were inactive premarket. The stock is off 9.7% over the past year.
-By Drew FitzGerald, Dow Jones Newswires; 212-416-2909; Andrew.FitzGerald@dowjones.com
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