FMC Tech Earnings Thrive on Improved Segments - Analyst Blog

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Offshore oilfield equipment manufacturer, FMC Technologies, Inc ( FTI ) reported stellar fourth quarter results. Improvement in all the segments contributed to the outperformance, with focus on the Subsea technologies segment that reported record quarterly results.

The Houston, Texas-based company reported adjusted diluted earnings per share of 79 cents, easily beating the Zacks Consensus Estimate of 65 cents and improving from the year-ago quarter level of 57 cents.

Revenues at $2,047.8 million were up 11.2% year over year and also above the Zacks Consensus Estimate of $1,892.0 million.

For 2013, FMC Tech reported diluted per share profits of $2.10, up about 18.0% from the 2012 level and ahead of the Zacks Consensus Estimate of $2.08. Revenues of $7,126.2 million increased 15.9% from the prior-year figure and also beat the Zacks Consensus Estimate of $6,974.0 million.

Segmental Analysis

Subsea Technologies: The segment revenues for the reported quarter were $1,390.0 million, up 12.6% from the fourth quarter of 2012.

Operating profit of $209.5 million jumped 43.7% year over year. The positive comparison reflects higher volumes and an improved performance.

Surface Technologies: Segment revenues were up 10.2% year over year at $489.0 million. The primary reason for the improved performance was volume growth in the international surface wellhead business.

Segment operating profit of $68.1 million increased 5.4% from the year-ago period.

Energy Infrastructure: The segment revenue for the October-December period was $172.6 million, about 3.0% above the fourth-quarter 2012 level.

However, operating profit decreased to $22.6 million from $28.2 million earned in the year-ago quarter.

Backlog

As of Dec 31, 2013, FMC Tech's total backlog (including intercompany eliminations) was $6,998.2 million compared with $5,377.8 million a year ago. Of this, backlog for Subsea Technologies was $5,988.8 million, while Surface Technologies and Energy Infrastructure backlog finished the quarter at $742.4 million and $288.4 million, respectively.

Balance Sheet

During the reported quarter, FMC Tech spent $76.6 million on capital programs. As of Dec 31, 2013, FMC Tech had cash and cash equivalents of $399.1 million and debt of $1,372.3 million, with a debt-to-capitalization ratio of 37.2%.

Guidance

Management estimated its 2014 diluted earnings per share in the range of $2.55-$2.75, amid projections of rising revenues and margins improvement in Subsea Technologies and strong performance from Surface Technologies' international markets.  

Zacks Rank

FMC Tech is a leading manufacturer and supplier of technology solutions for the energy industry. The company currently holds a Zacks Rank #4 (Sell).

Meanwhile one can consider better-ranked players from the same industry such as Matrix Service Company ( MTRX ), Profire Energy, Inc. ( PFIE ) and Dril-Quip, Inc. ( DRQ ). While Matrix Service and Profire Energy currently sport a Zacks Rank #1 (Strong Buy), Dril-Quip holds a Zacks Rank #2 (Buy).



DRIL-QUIP INC (DRQ): Free Stock Analysis Report

FMC TECH INC (FTI): Free Stock Analysis Report

MATRIX SERVICE (MTRX): Free Stock Analysis Report

PROFIRE ENERGY (PFIE): Get Free Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Earnings , Stocks

Referenced Stocks: DRQ , FTI , MTRX , PFIE

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