Cameron International Corp.'s (CAM) second-quarter earnings fell
6.8% as the oil-and-gas pressure-control equipment manufacturer was
hurt by acquisitions and the Gulf oil spill.
Profit topped expectations excluding charges and the company
raised its 2010 earnings view again, this time to $2.30 to $2.35 a
share from $2.20 to $2.30, as it projected 58 cents to 60 cents a
share for the third quarter. Analysts' average estimate was 58
cents, according to Thomson Reuters.
Cameron came under intense scrutiny in the first days following
the April explosion of the Deepwater Horizon drilling rig in the
Gulf of Mexico, killing 11 workers and sparking the worst offshore
oil spill in U.S. history. Cameron built the rig's blowout
preventer, a critical safety device that failed to shut down the
well.
However, the disaster may lead to new sales for Cameron, the
biggest in the industry, and other makers of blowout preventers for
offshore rigs. Regulators are expected to require stronger, more
reliable models and companies are looking to improve their safety
systems before new rules go into effect.
Cameron was hurt last year by weak demand for oil-and-gas
drilling equipment. The company also upgraded factories and cut
costs and recycle times to reinforce its position as a low-cost
manufacturer in many of its businesses.
It reported a second-quarter profit of $129.2 million, or 52
cents a share, down from $138.6 million, or 62 cents a share, a
year earlier. The latest period included 6 cents in charges while
the prior year had a net 2-cent gain. Cameron in April projected
earnings of 52 cents to 55 cents.
Revenue increased 14% to $1.45 billion, compared with a
prior-year decline by the same percentage. Analysts most recently
forecast $1.47 billion.
Gross margin fell to 32.2% from 33.8%.
Drilling and production business, Cameron's largest segment by
revenue, had 18% growth by that measure. However, the compression
systems unit had a 19% drop on weakness in global industrial
markets.
Orders rose 54% from a year earlier, while backlog as of June 30
was down 1.2% during the quarter to $4.92 billion.
Shares closed Tuesday at $39.64 and were inactive premarket.
-By Tess Stynes, Dow Jones Newswires; 212-416-2481;
Tess.Stynes@dowjones.com