Oil drilling equipment maker
FMC Technologies Inc.
) reported second quarter diluted earnings per share (excluding
one-time charge of 4 cents) of 48 cents, ahead of the Zacks
Consensus Estimate of 47 cents and the year-ago profit of 46
cents. The results were driven by strength in its subsea
Revenues at $1,707.9 million were up 14.3% year over year and
also came above the Zacks Consensus Estimate of $1,637.0 million.
FTI 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 $1,123.7
million, an increase of 18.8% from the second quarter of 2012,
buoyed by a rise in sales of subsea systems.
Operating profit came in at $123.4 million, up 12.5% year over
year. The positive comparison reflects higher sales and better
Segment revenues were up 6.4% year-over-year to $440.2 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 revenue.
But FTI's segment operating profit - at $57.3 million - decreased
32.0% from the year-ago period, hamstrung by depressed North
American fluid control activity and pitfalls from the Canadian
breakup on completion services.
The segment revenue for the Apr-Jun period was $158.0 million,
13.4% above the second quarter 2012 level of $139.4 million.
Operating profit improved to $18.5 million from $9.1 million
earned a year ago, helped by better showing in loading systems
and measurement solutions.
As of Jun 30, 2013, FTI's total backlog (including intercompany
eliminations) was a record $6,720.3 million, compared to $5,204.7
million a year ago. Of this, backlog for Subsea Technologies was
$5,866.3 million, while Surface Technologies and Energy
Infrastructure backlog finished the quarter at $581.7 million and
$281.6 million, respectively.
During the quarter, FTI spent $77.8 million on capital programs.
As of Jun 30, 2013, the company had cash and cash equivalents of
$267.6 million and long-term debt (including current portion) of
$1,533.3 million, with a debt-to-capitalization ratio of 44.2%.
Management raised the lower end of its 2013 earnings per share
guidance, which now stands in the range of $2.10-$2.25, as
against the previous $2.05-$2.25.
Zacks Rank & Stock Picks
FTI currently carries a Zacks Rank #2 (Buy), implying that it is
expected to outperform the broader U.S. equity market over the
next one to three months.
Apart from FTI, one can look at
Natural Gas Services Group Inc.
) as good buying opportunities. These energy equipment service
providers - sporting a Zacks Rank #1 (Strong Buy) - have solid
secular growth stories with potential to rise significantly from
CAMERON INTL (CAM): Free Stock Analysis
DRIL-QUIP INC (DRQ): Free Stock Analysis
FMC TECH INC (FTI): Free Stock Analysis
NATURAL GAS SVC (NGS): Free Stock Analysis
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