FMC Tech Meets EPS, Beats Rev - Analyst Blog
13 Februar 2013 - 9:40AM
Zacks
Offshore oilfield equipment
manufacturer, FMC Technologies (FTI) reported
fourth-quarter adjusted diluted earnings per share of 57 cents, in
line with the Zacks Consensus Estimate of 57 cents and better than
the year-ago period profit of 41 cents. The results were aided by
Surface Technologies’ international surface wellhead business and
strong performance in the international market.
Revenues at $1,840.9 million were up 22.7% year over year and also
above the Zacks Consensus Estimate of $1,720.0 million.
Segmental Analysis
Subsea Technologies: The segment revenue
for the most recent quarter was $1,235.5 million, up 28.2% from the
fourth quarter of 2011 buoyed by a rise in the sales of subsea
systems.
Operating profit came in at $151.2 million, up 116.6% year over
year. The positive comparison reflects higher volumes and an
improved performance.
Surface Technologies: Segment revenues
were up 18.7% year over year at $443.7 million. The main reasons
for the improved performance are volume growth in the surface
wellhead business and revenues from the acquisition of Pure Energy
Services Ltd. – the leading provider of frac flowback services.
But segment operating profit of $64.6 million decreased 15.4% from
the year-ago period, hamstrung by condensed fluid control and
surface wellhead activity in North America.
Energy Infrastructure: The segment
revenue for the October-December period was $166.6 million, 10.3%
above the fourth-quarter 2011 level.
Operating profit increased to $22.8 million from $20.2 million
earned in the year-ago quarter, owing to better project
execution.
Backlog
As of Dec 31, 2012, FMC’s total backlog (including intercompany
eliminations) was $5,377.8 million compared with $4,876.4 million a
year ago. Of this, backlog for Subsea Technologies was $4,580.1
million, while Surface Technologies and Energy Infrastructure
backlog finished the quarter at $500.8 million and $298.0 million,
respectively.
Balance Sheet
During the quarter, FMC spent $122.9 million on capital programs.
As of Dec 31, 2012, the company had cash and cash equivalents of
$342.1 million and debt of $1,640.8 million, with a
debt-to-capitalization ratio of 47.2%.
Guidance
Management estimated its 2013 earnings per share in the range of
$2.05–$2.25, on the back of rising Subsea Technologies revenue and
margins and continuous solid performance in international surface
wellhead.
Zacks Rating
FMC Technologies operates manufacturing facilities in 15 countries
outside the U.S., and approximately three-fourths of its sales are
generated internationally. The company’s operating areas include
economically and politically volatile regions such as North Africa,
West Africa, the Middle East, Latin America and Asia Pacific.
Instability and unforeseen changes in these markets may have an
adverse impact on its operations and earnings.
Additionally, oilfield service stocks are extremely volatile and
the correlation of their movement with underlying business
fundamentals is sometimes difficult to establish. As such, the
shares of FMC Technologies may not be suitable for investors who
are not comfortable with day-to-day volatility.
The company currently retains a Zacks Rank #4 (Sell), implying that
it is expected to underperform the broader U.S. equity market over
the next one to three months.
However, some other companies in
the energy sector are expected to perform well in the coming one to
three months. These include Cenovus Energy Inc
(CVE) with a Zacks Rank #1 (Strong Buy) as well as
McDermott International (MDR) and Technip
Ads (TKPPY) with a Zacks Rank #2 (Buy).
CENOVUS ENERGY (CVE): Free Stock Analysis Report
FMC TECH INC (FTI): Free Stock Analysis Report
MCDERMOTT INTL (MDR): Free Stock Analysis Report
(TKPPY): ETF Research Reports
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