Cameron has reported a record level of fully diluted quarterly earnings per share from continuing operations, excluding other costs, of US$1.34 for the fourth quarter of 2014, compared to US$0.90 for the same period in 2013. Cash generated by operations was US$938 million in the fourth quarter of 2014, a 49% increase from the same period in 2013.
The other cost items for the fourth quarter amounted to US$0.40 per fully diluted share, due primarily to the net impact of litigation expense and restructuring costs partially offset by one time credits; the other cost items for the fourth quarter of 2013 amounted to US$0.05 per fully dilute share, related primarily to integration and restructuring costs. On a GAAP basis, the company’s fully diluted earnings per share from continuing operations were US$1.30 for the fourth quarter of 2014m as compared to US$0.85 for the fourth quarter of 2013.
For the full year 2013, the company reported fully diluted earnings per share from continuing operations, excluding other costs, of US$4.14, compared to US$2.89 for 2013. On a GAAP basis, the Company’s 2014 diluted earnings per share from continuing operations were US$3.83 as compared to US$2.60 for 2013.
Commenting on the company’s performance in the fourth quarter of 2014 relative to the year ago period, Chairman and Chief Executive Officer Jack B. Moore, said: “Cameron’s financial results were due largely to the strong performance of our Drilling and Surface segments combined with an 11% decline in consolidated SG&A expense. In particular, the Drilling segment reported an 89% increase in operating income and an almost 700-basis point improvement in operating income margin relative to the year ago quarter, while our Surface segment reported a 23% increase in operating income. On a consolidated basis, these factors contributed to a segment operating income margin of 15.0% for Cameron, which is above the year ago quarter and demonstrates the success of our multi-year margin improvement program. Additionally, the increase in cash from operations reflects, in part, our sharp focus on reducing work capital.”
Orders and backlog
New orders and backlog for the fourth quarter of 2014 declined sequentially and as compared to the year ago period, reflecting reduced activity levels across the industry in response to the recent declines in commodity prices. “Even so, we continued to book significant new agreements during the quarter, most notably the multi-year contract with ExxonMobil Canada Properties for topside wellhead equipment and production trees for the Hebron project, a 52 well development located offshore Newfoundland – as well as OneSubsea’s execution of definitive agreements for the subsea well intervention alliance with Sclumberger and Helix””, Moore said.
Cameron’s cash flow from operations totalled US$938 million for the quarter and US$1.2 billion for the full year 2014.
Cameron’s capital expenditures totalled US$126 million in the fourth quarter and US$385 million for the full year 2014. The company expects full year 2015 capital expenditures to be moderately below the 2014 level.
Share repurchase activity
The company continued to repurchase its shares, investing approximately US$191 million to acquire approximately 3.4 million shares during the quarter of 2014. Full distributed shares outstanding at the end of the fourth quarter were approximately 195 million. As of the end of the fourth quarter of 2014, US$476 million remained under the company’s existing share purchase authorisation.
“Our backlog provides us with good visibility into a portion of Cameron’s 2015 business”, said Moore. “However, the surprising speed of the cyclical downturn has created significant uncertainty regarding the anticipated spending levels of our customers, especially in relation to our shorter cycle businesses, which account for a meaningful portion of our revenues and operating profit”.
Moore added, “Given our backlog, our string balance sheet and the company’s impressive operational performance in the fourth quarter of 2014, Cameron is well positioned to deal with the challenges posed in 2015 while we stay committed to advancing cost efficient solutions for our customers, execution and service excellence and the aggressive management of our cost structure”.
Adapted from a press release by Emma McAleavey.