Cameron Announces Results For Second Quarter Of 2015

- $0.83 fully diluted earnings per share excluding discontinued operations and other costs

- Results aided by strong execution and cost reduction

- 15% sequential-quarter increase in orders

Jul 23, 2015, 07:30 ET from Cameron

HOUSTON, July 23, 2015 /PRNewswire/ -- Cameron (NYSE: CAM) today reported fully diluted earnings per share, excluding discontinued operations and other costs, of $0.83 for the second quarter of 2015, compared to $0.95 for the same period of 2014.  

Other costs in the second quarter of 2015 amounted to $37 million, or $0.12 per share, as detailed in an accompanying table.  

On a GAAP basis, the Company's fully diluted earnings per share for the second quarter and first six months of 2015 were $0.73 and $0.98, respectively, as compared to $1.08 and $1.57 for the same periods of 2014.

Commenting on the Company's performance in the second quarter of 2015, Chairman and Chief Executive Officer Jack B. Moore, said, "The Company reported solid earnings and orders despite challenging market conditions.  Our financial results reflected outstanding execution across the enterprise when compared to the year ago quarter, driven by our Subsea and Drilling segments and a 16% decline in our SG&A expense."

Orders Consolidated orders increased 15% on a sequential-quarter basis from the first to the second quarter of 2015, reflecting the breadth and competitive differentiation of Cameron's portfolio of businesses.  Specifically, the sequential-quarter gains occurred in three of the Company's four reporting segments and amounted to 32% in Subsea, 23% in Drilling and 5% in Surface.  Subsea processing technology continued to gain traction during the second quarter, with the segment recording a significant award for subsea boosting in the Gulf of Mexico.  The segment also recorded a $330 million award for subsea production equipment for a project offshore North Africa and, separately, a front-end engineering and design contract for a proposed floating LNG development offshore northwest Australia.

Cash Flow from Operations and Capital Program The Company ended the quarter with cash, cash equivalents and short-term investments totaling $1.7 billion and a net debt to total capital ratio of 17%, which gives the Company significant flexibility to deal with the uncertainty presented by this downturn, execute on its strategic initiatives and position itself for future growth.  

Cameron's capital expenditures totaled $41 million in the second quarter of 2015, as compared to $73 million in the second quarter of 2014.  As of the end of the second quarter of 2015, approximately $285 million remained available under the Company's existing share purchase authorization.

2015 Outlook Moore said, "Although the industry downturn continues to pose many challenges, we believe the pace of the decline in customer spending has begun to moderate.  In this environment, we remain focused on the things we can control: the ongoing systemic reduction in our cost structure, execution, customer relationships and technology advancement.  We believe this focus will ensure that the company generates long-term value for our stakeholders."

Cameron (NYSE: CAM) is a leading provider of flow equipment products, systems and services to worldwide oil and gas industries.

In addition to the historical data contained herein, this document includes forward-looking statements regarding generation of long-term value, 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.

 

Cameron Unaudited Consolidated Condensed Results of Operations ($ and shares in millions except per share data)

Three Months Ended

June 30,

Six Months Ended

June 30,

2015

2014

2015

2014

Revenues

$     2,222

$     2,570

$     4,495

$     4,899

Costs and Expenses:

Cost of sales (exclusive of depreciation and amortization shown separately below)

1,585

1,850

3,193

3,540

Selling and administrative expenses

279

333

565

651

Depreciation and amortization

89

88

178

173

Interest, net

33

30

71

62

Other costs (gains), net

37

(6)

614

43

Total costs and expenses

2,023

2,295

4,621

4,469

Income (loss) from continuing operations before income taxes

199

275

(126)

430

Income tax provision

(47)

(65)

(100)

(110)

Income (loss) from continuing operations

152

210

(226)

320

Income from discontinued operations, net of income taxes

3

23

432

28

Net income

155

233

206

348

Less: Net income attributable to noncontrolling interests

15

12

17

16

Net income attributable to Cameron stockholders

$        140

$        221

$        189

$        332

Amounts attributable to Cameron stockholders:

Income (loss) from continuing operations

$        137

$        198

$      (243)

$        304

Income from discontinued operations

3

23

432

28

Net income attributable to Cameron stockholders

$        140

$        221

$        189

$        332

Earnings (loss) per common share attributable to Cameron stockholders:

    Basic -

    Continuing operations

$       0.71

$       0.97

$     (1.27)

$       1.46

    Discontinued operations

0.02

0.11

2.25

0.13

Basic earnings per share

$       0.73

$       1.08

$       0.98

$       1.59

Diluted -

    Continuing operations

$       0.71

$       0.97

$     (1.27)

$       1.44

    Discontinued operations

0.02

0.11

2.25

0.13

Diluted earnings per share

$       0.73

$       1.08

$       0.98

$       1.57

Shares used in computing earnings per common share:

Basic

191

204

192

209

Diluted

192

205

192

211

 

Cameron Consolidated Condensed Balance Sheets ($ millions)

June 30,

2015

December 31, 2014

(unaudited)

Assets:

Cash and cash equivalents

$          1,295

$            1,513

Short-term investments

436

113

Receivables, net

2,096

2,389

Inventories, net

2,938

2,929

Other current assets

390

391

Assets of discontinued operations

–

217

Total current assets

7,155

7,552

Plant and equipment, net

1,814

1,964

Goodwill

1,880

2,461

Intangibles, net

683

728

Other assets

200

187

Total Assets

$        11,732

$          12,892

Liabilities and Stockholders' Equity:

Short-term debt

$               31

$               263

Accounts payable and accrued liabilities

2,933

3,748

Accrued income taxes

298

168

Liabilities of discontinued operations

–

90

Total current liabilities

3,262

4,269

Long-term debt

2,813

2,819

Deferred income taxes

180

193

Other long-term liabilities

167

167

Total liabilities

6,422

7,448

Stockholders' Equity:

Common stock, par value $.01 per share, 400,000,000 shares authorized, 263,111,472 shares issued at June 30, 2015 and December 31, 2014

3

3

Capital in excess of par value

3,242

3,255

Retained earnings

5,820

5,631

Accumulated other elements of comprehensive income (loss)

(693)

(540)

Less: Treasury stock, 71,671,246 shares at June 30, 2015  (68,139,027 shares at December 31, 2014)

(3,955)

(3,794)

            Total Cameron stockholders' equity

4,417

4,555

    Noncontrolling interests

893

889

    Total equity

5,310

5,444

Total Liabilities and Stockholders' Equity

$        11,732

$        12,892

 

Cameron Unaudited Consolidated Condensed Statements of Cash Flows ($ millions)

Three Months Ended

June 30,

Six Months Ended

June 30,

2015

2014

2015

2014

Cash flows from operating activities:

    Net income

$     155

$     233

$     206

$     348

Adjustments to reconcile net income to net cash provided by (used for) operating activities:

Asset impairment and other charges

10

4

563

44

Pre-tax gain on sale of Centrifugal Compression business

–

(95)

(681)

(95)

        Depreciation

77

71

152

139

        Amortization

12

19

26

38

        Non-cash stock compensation expense

13

15

23

30

Gain from remeasurement of prior interest in equity method investment

–

(8)

–

(8)

Deferred income taxes and tax benefit of employee stock compensation plan transactions

(14)

34

(15)

17

Changes in assets and liabilities, net of translation, and non-cash items:

        Receivables

104

171

252

111

        Inventories

35

(53)

(70)

(228)

        Accounts payable and accrued liabilities

(284)

(257)

(755)

(471)

        Other assets and liabilities, net

(80)

79

134

114

            Net cash provided by (used for) operating activities

28

213

(165)

39

Cash flows from investing activities:

    Pre-tax net proceeds received from sale of Centrifugal Compression business

–

547

832

547

    Proceeds from sales and maturities of short-term investments

252

18

400

23

    Purchases of short-term investments

(264)

(33)

(723)

(38)

    Capital expenditures

(41)

(73)

(130)

(178)

Acquisitions

–

(18)

–

(18)

    Proceeds from sales of plant and equipment

2

4

7

10

            Net cash provided by (used for) investing activities

(51)

445

386

346

Cash flows from financing activities:

    Issuance of senior notes

–

500

–

500

    Debt issuance costs

–

(4)

–

(4)

    Short-term loan borrowings (repayments), net

(11)

(321)

(212)

9

    Purchase of treasury stock

(13)

(303)

(195)

(1,205)

    Contribution to noncontrolling interest owners

18

–

18

–

    Proceeds from stock option exercises, net of tax payments from stock compensation plan transactions

3

16

(5)

25

    Excess tax benefits from employee stock

        compensation plan transactions

–

4

1

6

    Principal payments on capital leases

(3)

(5)

(9)

(8)

        Net cash used for financing activities

(6)

(113)

(402)

(677)

Effect of translation on cash

2

8

(37)

4

Increase (decrease) in cash and cash equivalents

(27)

553

(218)

(288)

Cash and cash equivalents, beginning of period

1,322

972

1,513

1,813

Cash and cash equivalents, end of period

$  1,295

$  1,525

$  1,295

$  1,525

 

Cameron Unaudited Supplemental Segment Financial Data ($ millions)

Three Months Ended

June 30,

Six Months Ended

June 30,

2015

2014

2015

2014

Revenues:

    Subsea

$        658

$        735

$     1,289

$     1,416

Surface

510

613

1,053

1,151

Drilling

719

766

1,445

1,433

    Valves and Measurement (V&M)

381

539

809

1,039

    Elimination of intersegment revenues

(46)

(83)

(101)

(140)

         Consolidated revenues

$     2,222

$     2,570

$     4,495

$     4,899

Segment operating income before interest and income taxes:

    Subsea

$          67

$          46

$        124

$          75

Surface

69

108

161

199

Drilling

119

97

254

164

    V&M

44

110

89

208

    Elimination of intersegment earnings

(7)

(24)

(23)

(36)

        Segment operating income before interest and income taxes

292

337

605

610

Corporate Items:

    Corporate expenses

(23)

(38)

(46)

(75)

Interest, net

(33)

(30)

(71)

(62)

Other (costs) gains, net

(37)

6

(614)

(43)

        Consolidated income (loss) from continuing operations before income taxes

$        199

$        275

$       (126)

$        430

Orders:

    Subsea

$        742

$        596

$     1,302

$     1,025

Surface

471

619

921

1,255

Drilling

327

639

594

1,456

    V&M

369

517

757

1,053

         Consolidated orders

$     1,909

$     2,371

$     3,574

$     4,789

June 30,

December 31,

June 30,

Backlog (at end of period):

2015

2014

2014

    Subsea

$     4,178

$     4,263

$     4,763

    Surface

970

1,025

1,146

    Drilling

2,405

3,327

3,922

    V&M

809

921

1,026

        Consolidated backlog

$     8,362

$     9,536

$   10,857

 

Cameron Reconciliation of GAAP to Non-GAAP Financial Information ($ millions, except per share amounts)

Three Months Ended

June 30, 2015

After Tax

Diluted EPS(1)

Net income attributable to Cameron from continuing operations

$            137

$          0.71

Adjustments:

Facility closures and severance

13

Asset charges

6

Loss on Angola currency devaluation

6

    All other

(2)

Net income attributable to Cameron, excluding charges

$            160

$         0.83

 (1) Based on 192 million diluted shares

Three Months Ended

June 30, 2014

After Tax

Diluted EPS(1)

Net income attributable to Cameron from continuing operations

$            198

$          0.97

Adjustments:

Facility closures and severance

2

    Gain from remeasurement of prior interest in equity method investment

(6)

Net income attributable to Cameron, excluding charges

$            194

$         0.95

 (1) Based on 205 million diluted shares

 

 

SOURCE Cameron



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