Cameron Announces Results for First Quarter of 2015- $0.91 fully diluted earnings per share excluding income from discontinued operations, asset impairment charges and other costs
- Strong execution and cost control drive quarterly results
- Subsea orders up compared to year-ago quarter and compared to Q4 of 2014
Cameron (NYSE: CAM) today reported fully diluted earnings per share, excluding income from discontinued operations, asset impairment charges and other costs, of $0.91 for the first quarter of 2015, compared to $0.70 for the same period of 2014.
Results for the first quarter of 2015 included income from discontinued operations of $429 million, or $2.22 per share, primarily associated with a gain on the previously announced sale of the Company's Centrifugal Compression business; $538 million, or $2.79 per share, of asset impairment charges, primarily related to the impairment of goodwill in the Company's Process Systems business; and $18 million, or $0.09 per share, of other costs for restructuring costs and mark-to-market impact on currency derivatives. On a GAAP basis, the Company's fully diluted earnings per share were $0.25 for the first quarter of 2015, as compared to $0.51 for the first quarter of 2014.
Commenting on the Company's performance in the first quarter of 2015 relative to the year-ago period, Chairman and Chief Executive Officer Jack B. Moore, said, "Excluding the impact of the items cited above, Cameron delivered strong earnings, driven by sharp increases in operating income in our Subsea and Drilling segments as those businesses continued to successfully execute on their backlogs.
Also contributing to the improvement in the Company's results was the ongoing fundamental change in our cost structure, which resulted in a significant decline in SG&A expense. Operating income in our Surface segment remained relatively unchanged as cost reduction efforts and excellent execution mitigated the decline in orders for the segment's shorter-cycle business. Operating income in our Valves and Measurement segment was down considerably, reflecting the impact of weak orders in 2014 and the de-stocking of distributor inventories."
The company's effective tax rate for the quarter was 23.5%, excluding the impact of the gain and the asset impairment charges.
Orders and Backlog
Cameron's new orders and backlog for the first quarter of 2015 declined sequentially and as compared to the year-ago period, reflecting reduced activity levels across the industry. "Nevertheless," said Moore, "orders in our Subsea segment were 30% above the year-ago quarter and 8% above the fourth quarter of 2014 due in part to the booking of a sizable subsea systems order for a BP development offshore Egypt."
Cash Flow from Operations and Capital Program
Despite the customary increase in working capital during the first quarter, the Company ended the quarter with cash and short-term investments totaling $1.7 billion and a net debt to total capital ratio of 14%.
Cameron's capital expenditures totaled $89 million in the first quarter of 2015, as compared to $105 million in the first quarter of 2014.
Share Repurchase Activity Continued
The Company acquired almost 4 million shares during the first quarter of 2015. Fully diluted shares outstanding at the end of the first quarter amounted to approximately 192 million. As of the end of the first quarter of 2015, $298 million remained available under the Company's existing share purchase authorization.
Moore said, "Cameron executed well over the first three months of the year, and that helped to offset the seasonal first-quarter weakness that we had expected. Additionally, we saw accelerated benefits from our efforts to lower our fundamental cost structure and improve operational efficiency. Even so, for the balance of the year, the cyclical downturn represents an increasing headwind relative to that experienced in the first quarter."
Cameron (NYSE: CAM) is a leading provider of flow equipment products, systems and services to worldwide oil and gas industries.