Oil drilling equipment maker FMC Technologies Inc. (FTI) has purchased 173 acres of land in Generation Park West from McCord Development, Inc., a Houston-based real estate company. Generation Park is a meticulously planned enterprise park in Houston, Texas covering 4,000 acres of land.
FMC Technologies has been experiencing substantial growth over the last few years. In 2012 alone, the company recruited nearly 4000 employees and at present, has more than 16000 global staffs. Compared to 2011, FMC Technologies also generated more revenues in 2012.
Management expects that this new acreage will make the company more flexible other than providing more options going forward. However, the purchase price of the land has not yet been disclosed.
Incorporated in 2000, Houston, Texas-based FMC Technologies is a leading manufacturer and supplier of technology solutions for the energy industry. The company, which operates 27 manufacturing facilities in 16 countries, is engaged in the designing, producing and servicing technologically sophisticated systems and products such as subsea production and processing systems, surface wellhead production systems, high pressure fluid control equipment, measurement solutions, and marine loading systems for the oil and gas industry. The company conducts its operations in three segments: Subsea Technologies, Surface Technologies and Energy Infrastructure.
FMC Technologies is currently a Zacks #3 Rank (Hold) stock, in line with its peer Cameron International Corp. (CAM). We are also maintaining our long-term Neutral recommendation on FMC Technologies shares.
FMC Technologies is particularly well positioned in the subsea systems market. It is the company’s largest and fastest-growing business, accounting for about two-thirds of revenue. Subsea products have seen an increase in interest, and we expect earnings in this segment to strengthen – especially due to FMC Technologies’ leadership position in subsea production systems, including subsea trees, controls and manifold and tie-in systems.
On the flip side, like other oil services and equipment suppliers, results for FMC Technologies are directly exposed to oil and gas prices, which are inherently volatile and subject to complex market forces. A potential drop in prices could curtail deepwater drilling and subsea equipment demand, thereby affecting the company’s revenues, earnings and cash flow.
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