Cameron has delivered a record-level of fully diluted quarterly earnings per share from continuing operations, excluding other costs, of $1.34 for the fourth quarter of 2014, compared to $0.90 for the same period of 2013.
Cash generated by operations was $938 million in the fourth quarter of 2014, a 49% increase from the same period of 2013.
The other cost items for the fourth quarter of 2014 amounted to $0.04 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 $0.05 per fully diluted share, related primarily to integration and restructuring costs. On a GAAP basis, the Company’s fully diluted earnings per share from continuing operations were $1.30 for the fourth quarter of 2014, as compared to $0.85 for the fourth quarter of 2013.
For the full year 2014, the Company reported fully diluted earnings per share from continuing operations, excluding other costs, of$4.14, compared to $2.89 for 2013. On a GAAP basis, the Company’s 2014 fully diluted earnings per share from continuing operations were $3.83 as compared to $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 working 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,” said Moore, “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 offshoreNewfoundland – as well as OneSubsea’s execution of definitive agreements for the subsea well-intervention alliance with Schlumberger and Helix.”
Record Cash Flow from Operations and Disciplined Capital Program
Cameron’s cash flow from operations totaled $938 million for the quarter and $1.2 billion for the full year 2014.
Cameron’s capital expenditures totaled $126 million in the fourth quarter and $385 million for the full year 2014. The Company expects full-year 2015 capital expenditures to be moderately below the 2014 level.
“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 strong 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.”