Oil drilling equipment maker
FMC Technologies Inc.
) reported third quarter diluted earnings per share of 41 cents,
below the Zacks Consensus Estimate of 57 cents and the year-ago
period profit of 50 cents. The weak results were mainly due to
increased non-operating expenses, depressed North American market
for 'Surface Technologies' and lower profitability in the
company's energy infrastructure business. These factors were
partially offset by the strength in subsea systems orders.
CAMERON INTL (CAM): Free Stock Analysis
FMC TECH INC (FTI): Free Stock Analysis
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Revenues at $1,419.0 million were up 10.2% year over year but
came below the Zacks Consensus Estimate of $1,565.0 million.
FMC is particularly well positioned in the subsea technologies
market, where it competes with larger rival
Cameron International Corp.
). The segment revenue for the most recent quarter was $929.2
million, an increase of 11.5% from the third quarter of 2011,
buoyed by a rise in sales of subsea systems.
Operating profit came in at $115.5 million, up 20.2% year over
year. The positive comparison reflects higher sales and better
Segment revenues were up 8.1% year-over-year to $362.8 million.
The main reasons for the improved performance can be attributed
to the sales ramp-up in the surface wellhead business.
But segment operating profit - at $57.5 million - decreased 12.6%
from the year-ago period, hamstrung by an adverse sales mix.
The segment revenue for the July-September period was $133.2
million, 3.2% above the third quarter 2011 level.
However, operating profit declined to $7.7 million from $13.9
million earned a year ago, pulled down by lesser margin
assignments related to direct drive systems and separation
As of September 30, 2012, FMC's total backlog (including
intercompany eliminations) was $5,282.2 million, compared to
$4,602.2 million a year ago. Of this, backlog for Subsea
Technologies was $4,415.9 million, while Surface Technologies and
Energy Infrastructure backlog finished the quarter at $554.6
million and $312.7 million, respectively.
During the quarter, FMC spent $91.3 million on capital programs.
As of September 30, 2012, the company had cash and cash
equivalents of $566.2 million and debt of $1,529.1 million, with
a debt-to-capitalization ratio of 46.9%.
Management lowered its 2012 earnings per share guidance to the
$1.85-$1.95 range from the previous band of $2.10-$2.20.
Rating & Recommendation
FMC shares currently retain a Zacks #3 Rank, which translates
into a short-term Hold rating. We are also maintaining our
long-term Neutral recommendation on the stock.