Oil drilling equipment maker
FMC Technologies Inc.
) reported second quarter diluted earnings per share of 46 cents,
below the Zacks Consensus Estimate of 48 cents. The
weaker-than-expected results were mainly due to lower profitability
in the company's energy infrastructure business.
However, compared with the year-ago period, FMC's earnings per
share improved by a handsome 18.0% - from 39 cents to 46 cents - on
the back of strength in subsea and surface systems orders.
Revenues at $1,494.9 million were up 21.6% year over year and
were also above the Zacks Consensus Estimate of $1,486.0
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 $945.8
million, an increase of 18.1% from the second quarter of 2011,
buoyed by a rise in sales of subsea systems.
Operating profit came in at $109.7 million, up 30.6% year over
year. The positive comparison reflects higher sales, better
execution, as well as contribution from the Schilling Robotics
Segment revenues were up 33.4% year-over-year to a record $413.8
million. The main reasons for the improved performance can be
attributed to the sales ramp-ups in the fluid control and surface
Segment operating profit, at $84.2 million - the highest ever
reported - increased 49.0% from the year-ago period, driven by
higher volume in fluid control and surface wellhead on the back of
strong North American shale activity.
The segment revenue for the April-June period was $139.4 million,
16.0% above the second quarter 2011 level. This reflects better
performance from measurement solutions and material handling.
Operating profit came in at $9.1 million, compared with $10.7
million earned a year ago, pulled down by lower volumes in loading
As of June 30, 2012, FMC's total backlog (including intercompany
eliminations) was $5,204.7 million, compared to $4,964.3 million a
year ago. Of this, backlog for Subsea Technologies was $4,347.7
million, while Surface Technologies and Energy Infrastructure
backlog finished the quarter at $573.6 million and $284.7 million,
During the quarter, FMC spent $99.3 million on capital programs.
As of June 30, 2012, the company had cash and cash equivalents of
$275.3 million and debt of $1,216.2 million, with a
debt-to-capitalization ratio of 43.2%.
Management narrowed its 2012 earnings per share guidance to the
$2.10-$2.20 range from the previous band of $2.10-$2.25.
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 (CAM): Free Stock Analysis Report
FMC TECH INC (FTI): Free Stock Analysis Report
To read this article on Zacks.com click here.