Oil drilling equipment maker
FMC Technologies Inc.
) reported third quarter diluted earnings per share of 49 cents,
improving from 41 cents profit recorded a year ago. Both quarters
include 4 cents as the 2013 Multi Phase Meters earn-out
adjustment. The results were driven by the strength in its subsea
FMC TECH INC (FTI): Free Stock Analysis
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However, FTI's reported earnings failed to beat the Zacks
Consensus Estimate of 59 cents.
Revenues of $1,724.5 million were up 21.5% year over year but
below the Zacks Consensus Estimate of $1,745.0 million.
FTI is particularly well positioned in the subsea technologies
market. The segment revenues for the most recent quarter were
$1,119.9 million, up 20.5% from third quarter 2012.
Operating profit came in at $121.1 million, up 9.7% year over
year. The positive comparison reflects higher sales and better
Segment revenues were up 25.7% year over year at $455.9 million.
The main reasons for the improved performance can be attributed
to the sales ramp-up in the surface wellhead business, together
with contribution from completion services revenues.
Moreover, segment operating profit - at $74.5 million - also
increased 29.6% from the year-ago period on the back of higher
sales from the surface wellhead business.
: The segment revenue for the Jul-Sep period was $152.4 million,
15.0% above the third quarter 2012 level of $132.4 million.
Operating profit improved to $17.9 million from $12.8 million
earned a year ago, aided by better showing in loading systems and
As of Sep 30, 2013, FTI's total backlog (including intercompany
eliminations) was a record $7,365.7 million compared to $5,282.2
million a year ago. Of this, Subsea Technologies was the highest
contributor with a record backlog of $6,467.5 million, after
winning $1,728.7 million in contracts this quarter. Surface
Technologies and Energy Infrastructure backlog finished the
quarter at $608.1 million and $299.0 million, respectively.
During the quarter, FTI spent $80.8 million on capital programs.
As of Sep 30, 2013, FTI had cash and cash equivalents of $360.2
million and long-term debt (including current portion) of
$1,575.9 million, with a debt-to-capitalization ratio of 43.1%.
Management downsized the 2013 earnings per share guidance, which
now stands at $2.00-$2.10 against the previous $2.10-$2.25.
Zacks Rank & Stock Picks
FTI currently carries a Zacks Rank #3 (Hold), implying that it is
expected to perform in line with the broader U.S. equity market
over the next one to three months.
Meanwhile, one can consider
Stone Energy Corp.
Seadrill Partners LLC
Gulfmark Offshore, Inc.
) as investment opportunities. These energy sector stocks -
sporting a Zacks Rank #1 (Strong Buy) - have solid secular growth
stories with the potential to rise significantly from the current