UPDATE: Cameron 2Q Net Falls 6.8% On Merger, Gulf Charges

Cameron International Corp.'s (CAM) second-quarter earnings fell 6.8% as the oil-and-gas pressure-control equipment maker 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 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 in the Gulf of Mexico 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.

Orders increased 54% to $1.39 billion from the same period a year ago and the company received an initial order for its 20,000-psi blowout preventer, the largest blowout preventer on the market.

The order signals that Cameron is "not in the penalty box for the Deepwater Horizon incident and they are trusted," said Brian Uhlmer, an analyst with Pritchard Capital Partners.

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.

Shares of Cameron were recently up 5% at $41.63 apiece in premarket trading.

-By Jason Womack and Tess Stynes, Dow Jones Newswires; 713-547-9201; jason.womack@dowjones.com -

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