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Why Cameron (CAM) Is Up Today

Stocks in this article: CAM

NEW YORK (TheStreet) -- Cameron (CAM) gained 5.4% to $59.80 Thursday following its fiscal first-quarter earnings report that beat earnings and revenue estimates.

In its fourth-quarter earnings report the oil and gas equipment producer posted earnings of $1 a share, which beats the Capital IQ Consensus Estimate of 96 cents a share. Cameron's revenue rose 21.1% from the year-ago quarter to $2.94 billion. The reported revenue beats the analyst consensus of $2.76 billion.

Cameron issued a downside guidance for its first quarter with expected earnings of between 70 cents and 75 cents a share, compared to 76 cents a share estimates.

Despite the downside first-quarter guidance, the company issued an in-line guidance for the full year of 2014. Cameron expects earnings of between $3.60 and $4 a share for the year. Analysts estimate earnings of $3.80 a share for the year.

TheStreet Ratings team rates CAMERON INTERNATIONAL CORP as a "buy" with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate CAMERON INTERNATIONAL CORP (CAM) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • CAM's revenue growth has slightly outpaced the industry average of 9.3%. Since the same quarter one year prior, revenues rose by 12.5%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Net operating cash flow has increased to $199.60 million or 11.82% when compared to the same quarter last year. In addition, CAMERON INTERNATIONAL CORP has also vastly surpassed the industry average cash flow growth rate of -71.33%.
  • CAMERON INTERNATIONAL CORP's earnings per share declined by 13.3% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, CAMERON INTERNATIONAL CORP increased its bottom line by earning $3.02 versus $2.09 in the prior year. This year, the market expects an improvement in earnings ($3.25 versus $3.02).
  • Despite currently having a low debt-to-equity ratio of 0.32, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.08 is sturdy.

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