Can FMC Technologies (FTI) Surprise this Earnings Season? - Analyst Blog

FMC Technologies, Inc. (FTI) is set to report third-quarter 2014 results on Oct 21, after the close of the trading session. The oil drilling equipment manufacturer has beaten the Zacks Consensus Estimate in the past three quarters with an average positive surprise of 16.61%. Let's see how things are shaping up for this announcement.
    
Factors to Consider

The fate of FMC Technologies is directly exposed to oil and gas prices. The fall in commodity prices over the past few months is a matter of concern as it could negatively affect company earnings. However, this price decline is anticipated to have a more significant effect on exploration and production firms than oil services and equipment suppliers like FMC Technologies.

The company, with its diversified product portfolio, specialty service capabilities and proprietary technological expertise is set to benefit from its strong foothold in the sector. It is particularly well positioned in the subsea systems market.

A key aspect for FMC Technologies is its robust backlog. A continuous flow of contracts from biggies in the energy sector like Petrobras (PBR), ConocoPhillips and BP plc further strengthens its position.

More importantly, while reporting second-quarter results, FMC Technologies had increased its 2014 earnings per share guidance to $2.70−$2.80 from $2.55−$2.75 on expectations of strong results from the Surface Technologies segment and a positive outlook on the North American market.  

Earnings Whispers?

Our proven model does not conclusively show that FMC Technologies is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. That is not the case here, as you will see below.   

Zacks ESP:  Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is 0.00%.

Zacks Rank: Though FMC Technologies carries a Zacks Rank #3 (Hold), the company's ESP of 0.00% makes surprise prediction difficult.   

We caution against stocks with Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.

Stocks to Consider

Here are some other companies from the energy sector for investors to consider, that, according to our model have the right combination of elements to post an earnings beat this quarter:  

Tallgrass Energy Partners, LP (TEP) has Earnings ESP of +6.67% and a Zacks Rank #1 (Strong Buy).

Enbridge Energy Management LLC (EEQ) has Earnings ESP of +25.93% and a Zacks Rank #1.

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FMC TECH INC (FTI): Free Stock Analysis Report
 
PETROBRAS-ADR C (PBR): Free Stock Analysis Report
 
ENBRIDGE ENERGY (EEQ): Free Stock Analysis Report
 
TALLGRASS ENRGY (TEP): Free Stock Analysis Report
 
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