Tags: Cameron | gains | demand | CAM

Cameron International Gains On Oil Demand

By    |   Tuesday, 21 February 2012 10:28 AM

Cameron International (CAM) is a leading oilfield equipment manufacturer. It is gaining ground on global demand for petroleum while fending off lingering litigation related to the BP oil spill in 2010.

The Houston, Tex. company manufactures oilfield equipment, including blowout preventers, compressors, valves and wellheads and serves customers such as drilling contractors, oil and gas producers, pipeline operators and refiners.

Among other promising signs, the company's hefty order backlog totaled nearly $6 billion at year end vs. $1.71 billion a year ago. Cameron gets about two-thirds its revenues come from foreign markets and has more than 18,000 employees in 300-plus locations worldwide.

Publicly held British oil company BP (BP) was Cameron's biggest customer in 2010, accounting for 12 percent of its revenue. No individual customer accounted for more than 10 percent of Cameron's revenue in 2009 or 2008.

Cameron faces ongoing litigation, however, over its part in the massive BP oil spill in 2010. A blowout preventer that Cameron manufactured and delivered in 2001 failed to prevent the April 2010 explosion of the Deepwater Horizon drilling rig that BP operated in the Gulf of Mexico. The accident killed 11 workers and unleashing the worst offshore oil spill in the history of the United States.

BP and Cameron recently reached a settlement, ending all claims between the two companies related to the rig explosion and oil spill. But Cameron has disclosed in regulatory filings that it still faces claims of personal injury, wrongful death and property damage in more than 300 lawsuits arising from the Deepwater Horizon disaster.

Business conditions for Cameron may improve faster than the Deepwater Horizon litigation gets resolved. A recurring report based on a survey of executives in oil and natural gas production found that 63 percent expect their companies to invest more in the next 12 months, up from a comparable finding of 49 percent a year earlier.

The survey, commissioned by a consulting firm GL Noble Denton, also found that "this optimism does not mean that executives are sanguine about the industry's prospects, however. Rising costs and increasing regulation are both big concerns."

Record results

Cameron earned net income of $99.9 million, or 40 cents per share, in the final quarter of last year, down from $164.6 million, or 66 cents per share, during the same period in 2010. That included an after-tax charge of 37 cents per share, primarily related to the Deepwater Horizon accident, the company reported.

Revenues in the quarter were $2.03 billion, a 12 percent gain from the previous year. Revenues for the full year 2011 were $6.96 billion, or 13 percent higher than in the prior comparable period. Both were company records, management said.

Cameron next reports on May 3.

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