Cameron profits drop due to rising costs

Offshore equipment provider Cameron reported a 20 percent decrease in profits, as increased drilling system sales were offset by growing costs and a slowdown in unconventional onshore equipment.

The company earned $140.4 million for the second quarter 2013, down from $174.6 million for the same time 2012. Rising costs contributed to the decrease, with $2.3 billion for revenue for the second quarter 2013, up 11 percent from $2.1 billion in 2012.

The company expects revenue growth to continue, based on record levels of backlogs. Cameron’s backlog at the end of the second quarter was $10.5 billion, up from the prior year level of $7.5 billion.

“Our drilling, surface and subsea systems businesses each reflected year-over-year revenue improvements due to our record backlog position,” said Jack Moore, chief executive officer of Cameron, at the Thursday morning earnings call.

Cameron and Schlumberger recently closed on a joint venture, OneSubsea, to manufacture and develop products, systems and services for the subsea oil and gas market.

Moore said the growth in drilling systems has been especially strong for shallow water offshore equipment.

β€œThe real surprise is the jack-up market,” said Jack Moore, chief executive officer of Cameron. β€œWe see a little healthier market there than we had predicted.”

Company officials did not discuss the role of the Cameron blowout preventer in an uncontrolled natural gas well release and subsequent fire on a Hercules Offshore jack-up rig in the Gulf of Mexico this week. The blowout preventer was activated but failed to cut off the gas flow and may have caused the fire, the Coast Guard reported to Congress. The fire was controlled early Thursday morning, the Bureau of Safety and Environmental Enforcement reported.

Cameron has declined to comment on the source of the fire, saying that an investigation is ongoing.