Cameron International Corp Earnings: Increased Costs Strains Margins as Profit Drops

S&P 500 (NYSE:SPY) component Cameron International Corporation (NYSE:CAM) reported its results for the fourth quarter. Cameron International is a manufacturer of oil and gas pressure control and separation equipment, including valves, blowout preventers, wellheads, controls, and chokes.

Investing Insights: Will the iPad 3 Be the Next Catalyst for Apple’s Stock?

Cameron International Earnings Cheat Sheet for the Fourth Quarter

Results: Net income for the oil and gas equipment and services company fell to $99.9 million (40 cents per share) vs. $164.7 million (66 cents per share) a year earlier. This is a decline of 39.3% from the year earlier quarter.

Revenue: Rose 12.3% to $2.03 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: Cameron International Corporation fell short of the mean analyst estimate of 77 cents per share. It beat the average revenue estimate of $1.9 billion.

Quoting Management: Moore noted that record annual orders in Drilling and Surface Systems drove the year-over-year improvement in Drilling & Production Systems, while each of Valves & Measurement’s (V&M) businesses saw record annual orders. Moore said, “The Process & Compression segment saw record orders in the fourth quarter, as well as on an annual level,” and added, “We continue to be pleased with the balance in our business lines and the opportunities that our diverse product offerings provide.”

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 15.5%, with the biggest boost coming in the fourth quarter of the last fiscal year when revenue rose 23.5% from the year earlier quarter.

Gross margin shrank 0.5 percentage point to 29.6%. The contraction appeared to be driven by increased costs, which rose 13.1% from the year earlier quarter while revenue rose 12.3%.

The company fell short of forecasts after beating estimates in the previous two quarters. In the third quarter, it topped the mark by 4 cents, and in the second quarter, it was ahead by 2 cents.

Last quarter’s profit decrease breaks a streak of two consecutive quarters of year-over-year profit increases. Net income rose 10.6% in the third quarter and 14.6% in the second quarter.

Looking Forward: The outlook for the company’s results in the upcoming quarter is unfavorable. The average estimate for the first quarter of the next fiscal year is 77 cents per share, down from 80 cents ninety days ago. The average estimate for the fiscal year is $2.66 per share, a rise from $2.65 ninety days ago.

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

Don’t Miss These Additional Hot Earnings Stories:

Chipotle Mexican Grill Inc. Earnings: Double-Digit Growth Again

Las Vegas Sands Corp. Earnings: Revenue Strengthens for Fifth Straight Quarter by Double-Digits

Green Mountain Coffee Roasters Inc. Earnings: Beats Analysts’ Estimates

To contact the reporter on this story: Derek Hoffman at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com