Cameron International Corp Earnings Cheat Sheet: Revenue Strengthens for Fifth Straight Quarter by Double-Digits

S&P 500 (NYSE:SPY) component Cameron International Corporation (NYSE:CAM) reported net income above Wall Street’s expectations for the third quarter. Cameron International is a manufacturer of oil and gas pressure control and separation equipment, including valves, blowout preventers, wellheads, controls, and chokes.

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Cameron International Earnings Cheat Sheet for the Third Quarter

Results: Net income for the oil and gas equipment and services company rose to $164.5 million (67 cents per share) vs. $148.7 million (61 cents per share) in the same quarter a year earlier. This marks a rise of 10.6% from the year earlier quarter.

Revenue: Rose 10.4% to $1.69 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: CAM reported adjusted net income of 78 cents per share. By that measure, the company beat the mean estimate of 74 cents per share. It fell short of the average revenue estimate of $1.81 billion.

Quoting Management: Chief Executive Officer Jack B. Moore said that the year-over-year revenue increase was due to gains in the Drilling & Production Systems (NYSE:DPS) and Valves & Measurement (V&M) segments. He noted that EBITDA margins were up for the Company sequentially. Both the DPS and V&M segments drove these margin improvements. Total orders were $2.0 billion for the quarter, up from $1.48 billion in the third quarter of 2010, for an increase of 35%. “We are pleased at the pace of orders for the quarter, particularly with the strength of our shorter cycle businesses”, Moore commented, “In fact, this represents our third highest orders quarter in Cameron’s history”. Surface systems, Distributed Valves, Process Valves and Measurement had record quarterly orders. Subsea saw a 15% increase sequentially.

Key Stats:

The company has enjoyed double-digit year-over-year percentage revenue growth for the past five quarters. Over that span, the company has averaged growth of 17.8%, with the biggest boost coming in the third quarter of the last fiscal year when revenue rose 24% from the year earlier quarter.

The company has now beaten estimates the last two quarters. In the second quarter, it topped expectations with net income of 66 cents versus a mean estimate of net income of 64 cents per share.

Gross margins expanded last quarter, rising 1.3 percentage points to 32.6% from the year earlier quarter. This snaps a streak of two consecutive quarters of shrinking margins.

The company has now seen net income rise in two straight quarters. In the second quarter, net income rose 14.6% from the year earlier.

Looking Forward: Expectations for the company’s next quarter performance are higher than they were ninety days ago. Over the past three months, the average estimate for the fourth quarter has risen to 82 cents per share from 78 cents. The average estimate for the fiscal year is $2.68 per share, a rise from $2.60 ninety days ago.

Competitors to Watch: FMC Technologies, Inc. (NYSE:FTI), T-3 Energy Services, Inc. (NASDAQ:TTES), National-Oilwell Varco, Inc. (NYSE:NOV), Dril-Quip, Inc. (NYSE:DRQ), Flotek Industries, Inc. (NYSE:FTK), Baker Hughes Incorporated (NYSE:BHI), Lufkin Industries, Inc. (NASDAQ:LUFK), Oil States Intl., Inc. (NYSE:OIS), Halliburton Company (NYSE:HAL), and Bolt Technology Corp. (NASDAQ:BOLT).

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(Source: Xignite Financials)