Oil drilling equipment maker
FMC Technologies Inc.
) reported first quarter diluted earnings per share of 41 cents,
below the Zacks Consensus Estimate of 45 cents. The
weaker-than-expected results were mainly due to the effects of
higher project costs and expenses on subsea margins.
However, compared with the year-ago period, FMC's earnings per
share improved by a handsome 28.1% - from 32 cents (adjusted) to 41
cents - on the back of strength in subsea and surface systems
orders. The first quarter 2011 results have been adjusted for a
one-time tax benefit.
Revenues at $1,396.6 million were up 29.1% year over year and
were also above the Zacks Consensus Estimate of $1,393.0
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 $894.9
million, an increase of 29.8% from the first quarter of 2011,
buoyed by a rise in sales of subsea systems.
Operating profit came in at $75.1 million, up 7.3% year over
year. The positive comparison reflects higher sales, partially
offset by steeper completion costs associated with a West African
project, as well as sustained expenditure related to the expansion
of headcount to support growth.
Segment revenues were up 29.7% year-over-year to $377.8 million.
The main reasons for the improved performance can be attributed to
the sales ramp-ups in the fluid control and surface wellhead
Segment operating profit, at $78.0 million, increased 51.8% from
the year-ago period, driven by higher volume in fluid control and
surface wellhead on the back of strong North American shale
The segment revenue for the January-March period was $137.0
million, 33.0% above the first quarter 2011 level. This reflects
better performance from measurement solutions and material handling
in the quarter.
Operating profit came in at $9.3 million, compared with $4.5
million earned a year ago, pumped up by higher volumes in
measurement solutions as well as material handling.
As of March 31, 2012, FMC's total backlog (after accounting for
intercompany eliminations) was $5,599.2 million, compared to
$4,573.2 million at March 31, 2011. Of this, backlog for Subsea
Technologies was $4,688.5 million, while Surface Technologies and
Energy Infrastructure backlog finished the quarter at $627.8
million and $285.4 million, respectively.
During the quarter, FMC spent $92.0 million on capital programs.
As of March 31, 2012, the company had cash and cash equivalents of
$361.6 million and debt of $741.7 million, with a
debt-to-capitalization ratio of 32.2%.
Management reiterated its 2012 earnings per share guidance in
the $2.10 - $2.25 range.
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.
CAMERON INTL (
): Free Stock Analysis Report
FMC TECH INC (
): Free Stock Analysis Report
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