FMC Tech Reports Strong Q1 Earnings & Revs - Analyst Blog

Oilfield equipment manufacturer FMC Technologies, Inc. FTI reported another stellar quarter amid improvements in all its business segments, primarily its Subsea business.

The Houston, TX-based company announced first quarter 2014 diluted earnings per share of 57 cents, up 32.6% from the year-earlier figure of 43 cents. The earnings also surpassed the Zacks Consensus Estimate of 50 cents.  
FMC Technologies reported revenues of $1,824.4 million in the quarter compared with $1,646.0 million in first quarter 2013. Revenues were also above the Zacks Consensus Estimate of $1,795.0 million.

Segmental Analysis

Subsea Technologies: The segment revenues for the reported quarter were $1,202.0 million, up around 10.0% from the first quarter of 2013.

Operating profit of $141.7 million jumped 45.5% year over year, amid improved performance due to a more suited sales portfolio. The company expects this trend for improvement in the segment's revenues and operating profit through 2014.

Surface Technologies: Segment revenues were up 13.7% year over year at $479.5 million.

Segment operating profit of $87.7 million increased 53.1% from the year-ago period. The favorable comparison reflects the robust performance by the international surface wellhead business and improvement in the North American fluid control business.

Energy Infrastructure: The segment revenues for the January-March period were $145.6 million, 8.4% higher than the first-quarter 2013 level.

Operating profit increased to $15.6 million from $12.1 million earned in the year-ago quarter.

Backlog

As of Mar 31, 2014, FMC Tech reported a record total backlog (including intercompany eliminations) of $7,842.2 million, substantially higher than the prior-year quarter level of $5,426.8 million. Of this, backlog for Subsea Technologies was $6,786.6 million, while Surface Technologies and Energy Infrastructure backlog finished the quarter at $789.5 million and $285.0 million, respectively.

Balance Sheet

During the reported quarter, FMC Tech spent $92.0 million on capital programs. As of Mar 31, FMC Tech had cash and cash equivalents of $290.3 million and debt of $1,361.7 million, with a debt-to-capitalization ratio of 36.0%.

Guidance

Management reiterated its 2014 diluted earnings per share in the range of $2.55–$2.75. However, it now excludes the results from the operations of the material handling products business and the gain from its sale.

Zacks Rank & Other Stock Picks

FMC Tech is a leading manufacturer and supplier of technology solutions for the energy industry. The company currently has a Zacks Rank #3 (Hold).

One can consider better-ranked players from the broader energy sector such as Range Resources Corporation RRC, Helmerich & Payne, Inc. HP and Vermilion Energy Inc. (VET). All these stocks sport a Zacks Rank #1 (Strong Buy).