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Press release from PR Newswire

Cameron Announces Fourth Quarter 2012 Earnings

Thursday, January 31, 2013

Cameron Announces Fourth Quarter 2012 Earnings07:30 EST Thursday, January 31, 2013HOUSTON, Jan. 31, 2013 /PRNewswire/ -- Cameron (NYSE: CAM) reported earnings per share for the fourth quarter of 2012 of $0.95 excluding charges. This compares to earnings per share for the fourth quarter of 2011 of $0.77 excluding charges. After-tax charges for the fourth quarter of 2012 were $0.07 per share.  After-tax charges for the fourth quarter 2011 were $0.37 per share primarily related to the Deepwater Horizon matter. The Company reported GAAP net income of $218.3 million for the fourth quarter of 2012, or $0.88 per diluted share. Earnings per diluted share increased 120 percent compared to the fourth quarter 2011 earnings of $0.40 per diluted share. For the year the Company reported GAAP net income of $750.5 million, or $3.02 per diluted share. Earnings per diluted share increased 44 percent compared to full year 2011 earnings of $2.09 per diluted share.Record revenues up sequentially for quarter and year; increase in every segmentRevenues of $2.4 billion for the quarter were at a record level, up nearly 20 percent from $2.0 billion a year ago.  Record revenues for the year of $8.5 billion exceeded 2011 revenues of $7.0 billion by over 22 percent. Revenues were up sequentially for all three segments for both the quarter and the year. Quarterly and annual income before income taxes were at record levels. Quarterly income before income taxes was $273.4 million, up over 117 percent from $125.9 million a year ago. For the year, 2012 income before income taxes was $938.0 million up 44 percent from $651.1 million in 2011. Cameron Chairman and Chief Executive Officer Jack B. Moore said, "Both quarter and annual year-over-year revenue increases were due to double digit revenue gains in all three of the Company's segments." Record orders and backlogOrders booked in the fourth quarter of 2012 totaled a record $3.4 billion, up from $1.9 billion a year ago, representing an increase of about 80 percent. Full-year orders totaled $10.9 billion, up over 39 percent from $7.8 billion in 2011 and represented the highest order year in the Company's history. Moore noted record quarterly orders in the Drilling and Surface Systems businesses within the DPS segment and the V&M segment. These same business segments also achieved record annual orders. Moore said, "The Drilling Systems business saw unprecedented strength for the quarter, including 21 deepwater BOP awards as well as its previously announced first full deepwater rig package order. DPS accomplished this record level of orders without any large subsea awards."Cameron's backlog at the end of the fourth quarter was $8.6 billion, up from the beginning of the year level of $6.0 billion. Moore noted that this is a record backlog for the Company reflecting over 43 percent growth from a year ago.Record cash flow from operations while capital investments continueCameron's cash flow from operations totaled a record $544.7 million in the fourth quarter. Moore said, "We were pleased with our working capital management in the fourth quarter which resulted in strong annual cash flow of nearly $683.0 million.""We spent $427.2 million in capital expenditures during the year," Moore said, "with an emphasis on enhancing our aftermarket reach and capability and meeting demands in unconventional drilling."  Moore added that he expects Cameron's capital spending to remain around the $500 million level during 2013, saying, "We see a mix of needs and opportunities for our businesses during the year that continue to require a strong capital spending commitment. The majority will be targeted at expanding our Drilling infrastructure and other capacity needs."2013 earnings expected to reach $3.70 to $3.95 per shareMoore said Cameron currently expects its 2013 earnings to be in the range of $3.70 to $3.95 per diluted share, excluding charges. "Our 2013 earnings are expected to be another record. Earnings for the year will ultimately be influenced by the level of North American activity as well as our ability to execute on our record backlog," Moore said. First quarter 2013 earnings, excluding charges, are expected to reflect the typical seasonal decline from the fourth quarter and should approximate $0.70 to $0.75 per diluted share. "The timing of project deliveries will heavily influence our earnings for the first quarter," Moore added.Cameron (NYSE: CAM) is a leading provider of flow equipment products, systems and services to worldwide oil, gas and process industries.Website: www.c-a-m.comIn addition to the historical data contained herein, this document includes forward-looking statements regarding future earnings of the Company (including first quarter and full year 2013 earnings per share estimates), as well as expectations regarding working capital needs and capital expenditures, made in reliance upon the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  The Company's actual results may differ materially from those described in forward-looking statements.  Such statements are based on current expectations of the Company's performance and are subject to a variety of factors, some of which are not under the control of the Company, which can affect the Company's results of operations, liquidity or financial condition.  Such factors may include overall demand for, and pricing of, the Company's products, particularly as affected by North American activity; the size and timing of orders; the Company's ability to successfully execute the large subsea and drilling systems projects it has been awarded; the possibility of cancellations of orders; the Company's ability to convert backlog into revenues on a timely and profitable basis; the impact of acquisitions the Company has made or may make; changes in the price of (and demand for) oil and gas in both domestic and international markets; raw material costs and availability; political and social issues affecting the countries in which the Company does business; fluctuations in currency markets worldwide; and variations in global economic activity.  In particular, current and projected oil and gas prices historically have generally directly affected customers' spending levels and their related purchases of the Company's products and services.  Additionally, changes in oil and gas price expectations may impact the Company's financial results due to changes it may make in its cost structure, staffing or spending levels.Because the information herein is based solely on data currently available, it is subject to change as a result of changes in conditions over which the Company has no control or influence, and should not therefore be viewed as assurance regarding the Company's future performance.  Additionally, the Company is not obligated to make public indication of such changes unless required under applicable disclosure rules and regulations. CameronUnaudited Consolidated Condensed Results of Operations($ and shares in millions except per share data)Three Months Ended December 31,Twelve Months Ended December 31,2012201120122011Revenues:    Drilling & Production Systems. $ 1,393.7$  1,216.0$ 4,871.3$  4,061.5    Valves & Measurement556.7462.22,142.21,663.0    Process & Compression Systems475.4352.51,488.61,234.5                Total revenues2,425.82,030.78,502.16,959.0Costs and Expenses:Costs of sales (exclusive of depreciation and amortization shown separately below) 1,726.81,430.56,024.34,838.4    Selling and administrative expenses318.6277.71,161.21,001.5    Depreciation and amortization 64.861.2254.7206.6    Interest, net20.521.290.484.0    Other costs21.7114.233.5177.4                Total costs and expenses2,152.41,904.87,564.16,307.9Income before income taxes273.4125.9938.0651.1Income tax provision(55.1)(26.0)(187.5)(129.2)Net income$     218.3$       99.9$     750.5$     521.9Earnings per common share:    Basic $       0.88$        0.41$      3.05$        2.13    Diluted$       0.88$        0.40$      3.02$        2.09Shares used in computing earnings per common share:    Basic 246.7245.3246.4245.0    Diluted248.4247.4248.1249.2EBITDA, excluding other costs:Drilling & Production Systems $     238.7$     246.0$     862.2$     797.0Valves & Measurement126.892.3467.2334.4Process & Compression Systems77.538.0184.0153.9Corporate and other(1) (62.6)(53.8)(196.8)(166.2)    Total$     380.4$     322.5$ 1,316.6$  1,119.1 (1) Corporate EBITDA amounts exclude $21.7 and $114.2 million of other costs for the three-month periods ended December 31, 2012 and 2011, respectively; and $33.5 and $177.4 million for the years ended December 31, 2012 and 2011, respectively. CameronConsolidated Condensed Balance Sheets($ millions)December 31, 2012December 31, 2011(unaudited)Assets:Cash and cash equivalents$          1,185.8$             898.9Short-term investments517.0423.5Receivables, net1,966.71,757.3Inventories, net2,741.22,399.9Other499.9349.0    Total current assets6,910.65,828.6Plant and equipment, net 1,765.11,500.1Goodwill1,923.91,615.3Other assets558.6417.7            Total Assets$        11,158.2$          9,361.7Liabilities and Stockholders' Equity:Short-term debt$                29.2$                10.6Accounts payable and accrued liabilities3,045.72,669.7Accrued income taxes94.1?    Total current liabilities3,169.02,680.3Long-term debt2,047.01,574.2Deferred income taxes131.7184.5Other long-term liabilities244.4215.3        Total liabilities5,592.14,654.3Commitments and contingencies??Stockholders' equity:Common stock, par value $.01 per share, 400,000,000 shares    authorized, 263,111,472 shares issued at December 31, 2012     and 20112.62.6Preferred stock, par value $.01 per share, 10,000,000 shares     authorized, no shares issued or outstanding??Capital in excess of par value2,094.62,072.4Retained earnings 4,120.73,370.2Accumulated other elements of comprehensive income (loss)(30.0)(90.8)Less:  Treasury stock at cost, 16,415,336 shares at     December 31, 2012 and 17,579,397 shares at December 31, 2011. (621.8)(647.0)    Total stockholders' equity5,566.14,707.4    Total Liabilities and Stockholders' Equity$        11,158.2$          9,361.7 CameronUnaudited Consolidated Condensed Statements of Cash Flows($ millions)Three Months Ended December 31,Twelve Months Ended December 31,2012201120122011Cash flows from operating activities:    Net income$   218.3$     99.9$   750.5$   521.9    Adjustments to reconcile net income to             net cash provided by operating activities:            Depreciation58.845.2211.8160.2            Amortization6.016.042.946.4            Non-cash stock compensation expense13.410.044.736.7Deferred income taxes and tax benefit of employee stock compensation plan     transactions(25.5)(34.6)(85.1)(22.0)    Changes in assets and liabilities, net of             translation, acquisitions and non-cash items:            Receivables(94.8)(100.7)(144.0)(461.1)            Inventories70.534.3(368.9)(397.1)            Accounts payable and accrued liabilities307.1176.1213.0200.8            Other assets and liabilities, net(9.1)82.818.0122.7Net cash provided by operating activities544.7329.0682.9208.5Cash flows from investing activities:    Proceeds from sales and maturities of short-term investments256.815.21,031.715.2    Purchases of short-term investments(409.8)(438.0)(1,125.4)(438.0)    Capital expenditures(146.9)(159.6)(427.2)(388.1)    Acquisitions, net of cash acquired(39.6)(378.8)(349.3)(421.3)    Proceeds from sales of plant and equipment1.82.027.619.6                Net cash used for investing activities(337.7)(959.2)(842.6)(1,212.6)Cash flows from financing activities:    Short-term loan borrowings (repayments), net(4.0)(4.0)(41.9)45.7    Issuance of senior debt??499.3747.8    Debt issuance costs??(3.4)(4.7)    Redemption of convertible debentures???(705.7)    Purchase of equity call options, net???(12.2)    Purchase of treasury stock(8.8)(2.4)(21.3)(2.4)Proceeds from stock option exercises, net of tax payments from stock compensation plan transactions1.91.512.321.5Excess tax benefits from stock compensation plan transactions  1.63.711.19.0Principal payments on capital leases(3.1)(2.2)(11.3)(8.2)    Net cash provided by (used for) financing activities(12.4)(3.4)444.890.8Effect of translation on cash0.5(4.0)1.8(20.3)Increase (decrease) in cash and cash equivalents195.1(637.6)286.9(933.6)Cash and cash equivalents, beginning of period990.71,536.5898.91,832.5Cash and cash equivalents, end of period$ 1,185.8$   898.9$ 1,185.8$   898.9 CameronOrders and Backlog($ millions)OrdersThree Months Ended December 31,Twelve Months Ended December 31,2012201120122011Drilling & Production Systems$    2,544.5$       933.4$    7,326.8$   4,343.4Valves & Measurement540.7538.22,104.32,000.7Process & Compression Systems358.0443.21,455.61,483.5            Total$    3,443.2$   1,914.8$  10,886.7$   7,827.6 BacklogDecember 31,2012December 31, 2011Drilling & Production Systems$          6,576.4$    3,811.1Valves & Measurement1,051.01,144.9Process & Compression Systems969.81,013.1    Total$          8,597.2$    5,969.1 CameronReconciliation of GAAP to Non-GAAP Financial Information($ millions)Three Months Ended December 31, 2012Drilling & Production SystemsValves & MeasurementsProcess & Compression SystemsCorporateTotalIncome (loss) before income taxes$        202.1$   116.5$      67.9$   (113.1)$   273.4Depreciation & amortization36.610.39.68.364.8Interest, net???20.520.5Other costs???21.721.7EBITDA, excluding other costs$        238.7$   126.8$      77.5$     (62.6)$   380.4 Three Months Ended December 31, 2011Drilling & Production SystemsValves & MeasurementsProcess & Compression SystemsCorporateTotalIncome (loss) before income taxes$   211.3$   81.9$   27.4$   (194.7)$   125.9Depreciation & amortization34.710.410.65.561.2Interest, net???21.221.2Other costs???114.2114.2EBITDA, excluding other costs$   246.0$   92.3$   38.0$   (53.8)$   322.5 CameronReconciliation of GAAP to Non-GAAP Financial Information($ millions)Twelve Months Ended December 31, 2012Drilling & Production SystemsValves & MeasurementsProcess & Compression SystemsCorporateTotalIncome (loss) before income taxes$        712.3$   425.8$   147.1$   (347.2)$     938.0Depreciation & amortization149.941.436.926.5254.7Interest, net???90.490.4Other costs???33.533.5EBITDA, excluding other costs$        862.2$   467.2$   184.0$   (196.8)$  1,316.6   Twelve Months Ended December 31, 2011Drilling & Production SystemsValves & MeasurementsProcess & Compression SystemsCorporateTotalIncome (loss) before income taxes$   685.6$   294.1$ 116.0$   (444.6)$   651.1Depreciation & amortization111.440.337.917.0206.6Interest, net???84.084.0Other costs???177.4177.4EBITDA, excluding other costs$   797.0$   334.4$   153.9$   (166.2)$   1,119.1 CameronReconciliation of GAAP to Non-GAAP Financial Information($ millions, except per share amounts)Three Months Ended December 31, 2012After Tax(1)Diluted EPS(2)Net income, as reported$     218.3$           0.88Adjustments:    Impairment of intangibles14.0    International pension settlement costs0.4    Acquisition integration costs2.5    Mark-to-market impact on currency derivatives not designated as accounting hedges(1.9)    Joint venture formation costs2.2    Severance, restructuring and other costs0.1            Net income, excluding charges$     235.6$           0.95       (1) Individual adjustments assume a 20.2% effective tax rate(2)Based on 248.4 million diluted shares Three Months Ended December 31, 2011After Tax(1)Diluted EPS(2)Net income, as reported$       99.9$       0.40Adjustments:    Costs associated with the Deepwater Horizon matter and BOP litigation85.4    Mark-to-market impact on currency derivatives not designated as     accounting hedges2.3    Severance, restructuring and other costs2.8            Net income, excluding charges$     190.4$      0.77 (1)Individual adjustments assume a 20.7% effective tax rate(2) Based on 247.4 million diluted shares CameronReconciliation of GAAP to Non-GAAP Financial Information($ millions, except per share amounts)Year Ended December 31, 2012After Tax(1)Diluted EPS(2)Net income, as reported$     750.5$        3.02Adjustments:    Impairment of intangibles14.0    International pension settlement costs5.3    BOP litigation costs2.0    Acquisition integration costs10.6    Mark-to-market impact on currency derivatives not designated as     accounting hedges(12.6)    Joint venture formation costs2.2    Severance, restructuring and other costs5.3            Net income, excluding charges$     777.3$       3.13         (1)Individual adjustments assume a 20.0% effective tax rate(2)Based on 248.1 million diluted shares Year Ended December 31, 2011After Tax(1)Diluted EPS(2)Net income, as reported$     521.9$       2.09Adjustments:    Costs associated with the Deepwater Horizon matter and BOP litigation114.8    Mark-to-market impact on currency derivatives not designated as     accounting hedges7.5    Cost associated with retiring the 2.5% convertible debentures11.6    Severance, restructuring and other costs8.3            Net income, excluding charges$     664.1$      2.67       (1) Individual adjustments assume a 19.8% effective tax rate(2)Based on 249.2 million diluted shares SOURCE CameronFor further information: Jeff Altamari, Vice President, Investor Relations, +1-713-513-3344