Cameron International Corp.'s (CAM) first-quarter earnings fell
9.1% as the oil-and-gas pressure-control equipment maker recorded
previously disclosed charges related to cost overruns on a subsea
project and the Libya sanctions.
For the year, the company now sees earnings of $2.50 to $2.60 a
share, a view that includes charges that totaled 17 cents in the
first quarter, compared with Cameron's February forecast of $2.65
to $2.75. Cameron said the charges aren't being accounted for as
discrete items.
Cameron also projected current-quarter earnings of 60 cents to
65 cents a share, while analysts polled by Thomson Reuters expected
66 cents.
Shares of Cameron fell 3.8% to $52.35 in premarket trading, as
results in the latest quarter also missed expectations.
The company, which was hurt during the recession amid a weak
demand environment for oil and gas drilling equipment, has reported
revenue growth for five consecutive quarters, with the top line
results in 2010 primarily driven by record deliveries of subsea
equipment.
Cameron posted a profit of $109.5 million, or 43 cents a share,
down from $120.4 million, or 48 cents a share, a year earlier. The
latest results included a 3-cent charge, primarily related to
litigation costs associated with the Deepwater Horizon explosion.
The company in February forecast a profit of 63 cents to 66 cents a
share.
Revenue jumped 11% to $1.5 billion, below Wall Street's $1.62
billion estimate.
Gross margin slid to 29.5% from 32.1%.
The drilling and production business, Cameron's largest segment
by revenue, posted a 5.6% increase in revenue. The compression
systems unit had a 30% jump.
Cameron reported orders grew 26% to $1.52 billion from a year
ago. Backlog at the quarter's end was down 1.8% at $4.89 billion
from a year ago, but was up 1.7% from the fourth quarter.
Last week, BP PLC (BP, BP.LN) sued three companies, including
Cameron, accusing them of negligence that led directly to the
Deepwater Horizon explosion that killed 11 workers and caused a
massive oil spill. Cameron, which, manufactured a critical safety
device called a blowout preventer, said in order to protect itself,
it had filed counterclaims against other parties to the
litigation.
-By John Kell, Dow Jones Newswires; 212-416-2480;
john.kell@dowjones.com