FMC President Buys $1M In Stock Day After Street Targets Cut
Shares of FMC Technologies, Inc. (NYSE: FTI) tumbled on Wednesday after the company reported that earned $0.46 in its second quarter, short of the $0.61 per share analysts were expecting while revenue of $1.7 billion fell slightly short of the $1.71 billion analysts were estimating.
In a report published Wednesday, Kevin Simpson of Griffin Securities commented that the provider of technology solutions for the energy industry, reported a weaker than expected second quarter due to a 29 percent revenue decline in its surface technologies segment and hardware for hydraulic fracturing activity in the US and Canada.
"While weakness in this business was expected, the size of the decline was exaggerated by a combination of more pricing weakness than in prior downcycles and the cannibalization of customer inventories of treating iron for fracturing with FMC's large and numerous smaller US and Canadian customers striving to conserve cash," Simpson wrote.
Simpson also noted that FMC's "more important" subsea business "held up well" with a reported quarterly revenue of $1.2 billion (down seven percent year over year) and EBIT of $183.5 million (down five percent year over year) with margins of 14.8 percent (close to management's full-year guidance of 15 percent). The analyst added that the segment's results were "particularly impressive" given the US dollar strength versus currencies where the company has high exposure, such as the Euro, Norwegian Kroner and Brazilian Real.
However, FMC's initial expectations for the 2016 subsea EBIT margins was in the "low double digits," missing Simpson's 14.0 percent expectations and down from an estimated 14.9 percent level in 2015.
The analyst concluded that the "cautious guidance" for the subsea segment resulted in a revised 2015 earnings per share estimate to $2.30 from a previous $2.50 and a slashing of his 2016 earnings per share estimate from $2.10 to $1.75. As such, the expected negative subsea margin trend will "likely" limit upside for the next few quarters.
Simpson maintained a Neutral rating on FMC with no assigned price target.
Elsewhere on the Street, analysts at Jefferies upgraded shares of FMC from Underperform to Hold but actually lowered their price target from $33 to $32. Analysts at FBR Capital upgraded shares to Market Perform from Underperform.
President Unfazed; Buys $1 Million Of Stock
Doug Pferdehirt, President and Chief Operating Officer of FMC purchased $1 million worth of his company's stock just one day after Wall Street's bearish tone, according to TipRanks.
An SEC filing confirmed the purchase. The executive acquired 30,304 shares at a price of $33, boosting his total holdings to 322,562 shares.
Pferdehirt has been active in buying shares of his company in recent months. The executive bought 57,830 shares in early May at $43.23 per share and also bought 71,244 shares in late February at $39.98 per share.
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