By the OGJ Online Staff
HOUSTON, Oct. 30 -- Cooper Cameron Corp., Houston, increased both revenue and earnings during the third quarter, but a reduced US rig count and less spending by customers will dampen the company's business "for at least the next several quarters," said Sheldon R. Erikson, chairman, president, and CEO.
"Looking ahead, North American markets are clearly slowing, but it appears that bidding and project awards in the subsea markets, especially non-US, will continue to be reasonably active," he said.
"The weakness in domestic natural gas that developed during the summer and a declining US rig count, coupled with the uncertainty in energy markets stemming from the global slowdown, are expected to lead to weakness across our North American gas market-related business lines during the next several quarters," said Erikson.
"While we believe it is too early to provide specific guidance on expectations for next year, without improvement in our markets in the first half of next year, we do not currently expect our results for 2002 to exceed those of 2001," he said.
Third quarter revenue was up 19% to $417.2 million from $350 million a year ago, with each of Cooper Cameron's business segments posting increases. Earnings jumped to $34.4 million, compared to $8.3 million during the same period in 2000.
Revenue generated by Cooper Cameron Valves (CCV) was up significantly from year-ago levels and modestly higher sequentially.
But Erikson said the slowing of oilfield activity is beginning to affect certain of CCV's product lines. "CCV has begun to see some weakness in oilfield valves, though the pipeline ball valve and Orbit valve businesses have held up fairly well," he said.
Orders received by the company during the third quarter totaled $478 million, up 47% from the same period last year. Cameron's total orders were up more than 57%, primarily as a result of a $100 million multi-year order from ExxonMobil for its Kizomba project off West Africa, officials said.
At the end of September, the company's backlog of orders totaled $686 million, the highest level since the first quarter of 1999. The backlog increased 10% during the quarter, because of the Kizomba award, and is up 40% from $490 million in the same period last year.
Cooper Cameron's total debt, net of cash and investments, was $310 million at the end of the quarter, up from $176 million at the end of last year. Its net debt-to-total capitalization ratio was 26% at the quarter's close.
Erikson said the company has the financial flexibility to pursue a variety of opportunities. "Acquisitions within our current product lines will continue to be a priority, and additional stock repurchases will also be considered," he said.
Cooper Cameron repurchased 611,000 shares during the third quarter under a previously authorized program.
Cooper Cameron manufactures oil and gas pressure control equipment, including valves, wellheads, controls, chokes, blowout preventers, and assembled systems for oil and gas drilling, production, and transmission. It also manufactures centrifugal air compressors, integral gas compressors, and turbochargers.
