(Reuters) - Oilfield equipment maker Cameron International Corp CAM.N forecast current-quarter profit below analysts’ expectations amid a slowdown in natural gas drilling in North America, sending its shares down 7 percent.
Energy companies in North America have cut down on drilling to stem the flow of cheap shale gas that has depressed prices. The number of rigs drilling for natural gas in the United States fell to a 13-year low in the third quarter.
“Not all of Cameron’s business units will escape the softness in the global economy nor the correction in North American rig activity,” Chief Executive Jack Moore said on a conference call with analysts.
Cameron forecast adjusted fourth-quarter earnings in the range of 95 cents to 97 cents per share. Analysts were expecting $1.08 per share, according to Thomson Reuters I/B/E/S.
National Oilwell Varco Inc (NOV.N), the largest U.S. oilfield equipment maker, also warned that demand for its products had weakened in North America.
However, Cameron’s outlook for the rest of the year remained robust on higher demand in international and deepwater markets.
The company expects current-quarter revenue to increase in the upper single-digit range from the third quarter, Chief Financial Officer Charles Sledge said on the call, adding that margins are likely to expand in all its segments in 2013.
He forecast earnings before interest, taxes, depreciation, and amortization (EBITDA) margins of between 17 percent and 18 percent for 2013.
But analysts were not convinced.
“We would expect negative earnings revision of at least 5 percent to 2013 estimates,” analysts at Simmons & Co said in a note to clients.
The company reported third-quarter results above analysts’ expectations on higher orders.
Orders rose 15 percent to $2.30 billion in the quarter, while backlog was up 30 percent at $7.60 billion.
However, Barclays analyst James West said orders slipped about 10 percent from the second quarter and missed his $2.96 billion estimate.
Net income rose to $223.6 million, or 90 cents per share, in the third quarter, from $164.5 million, or 67 cents per share, a year earlier.
Revenue rose nearly 32 percent to $2.20 billion.
Excluding items, profit was 91 cents per share.
Analysts were expecting a profit of 88 cents per share on revenue of $2.19 billion.
Shares of Houston-based Cameron, which has a market value of $12.62 billion, were down nearly 6 percent at $48.24 in late morning trade on the New York Stock Exchange on Wednesday.
The stock had gained 4 percent until Friday close, compared with a 1.6 percent rise for the Philadelphia Stock Exchange oil service index .OSX. (Reporting by Swetha Gopinath in Bangalore; Editing by Roshni Menon,; Sriraj Kalluvila)