Offshore oilfield equipment manufacturer, FMC Technologies, Inc (FTI) reported stellar fourth quarter results. Improvement in all the segments contributed to the outperformance, with focus on the Subsea technologies segment that reported record quarterly results.
The Houston, Texas-based company reported adjusted diluted earnings per share of 79 cents, easily beating the Zacks Consensus Estimate of 65 cents and improving from the year-ago quarter level of 57 cents.
Revenues at $2,047.8 million were up 11.2% year over year and also above the Zacks Consensus Estimate of $1,892.0 million.
For 2013, FMC Tech reported diluted per share profits of $2.10, up about 18.0% from the 2012 level and ahead of the Zacks Consensus Estimate of $2.08. Revenues of $7,126.2 million increased 15.9% from the prior-year figure and also beat the Zacks Consensus Estimate of $6,974.0 million.
Segmental Analysis
Subsea Technologies: The segment revenues for the reported quarter were $1,390.0 million, up 12.6% from the fourth quarter of 2012.
Operating profit of $209.5 million jumped 43.7% year over year. The positive comparison reflects higher volumes and an improved performance.
Surface Technologies: Segment revenues were up 10.2% year over year at $489.0 million. The primary reason for the improved performance was volume growth in the international surface wellhead business.
Segment operating profit of $68.1 million increased 5.4% from the year-ago period.
Energy Infrastructure: The segment revenue for the October-December period was $172.6 million, about 3.0% above the fourth-quarter 2012 level.
However, operating profit decreased to $22.6 million from $28.2 million earned in the year-ago quarter.
Backlog
As of Dec 31, 2013, FMC Tech’s total backlog (including intercompany eliminations) was $6,998.2 million compared with $5,377.8 million a year ago. Of this, backlog for Subsea Technologies was $5,988.8 million, while Surface Technologies and Energy Infrastructure backlog finished the quarter at $742.4 million and $288.4 million, respectively.
Balance Sheet
During the reported quarter, FMC Tech spent $76.6 million on capital programs. As of Dec 31, 2013, FMC Tech had cash and cash equivalents of $399.1 million and debt of $1,372.3 million, with a debt-to-capitalization ratio of 37.2%.
Guidance
Management estimated its 2014 diluted earnings per share in the range of $2.55–$2.75, amid projections of rising revenues and margins improvement in Subsea Technologies and strong performance from Surface Technologies’ international markets.
Zacks Rank
FMC Tech is a leading manufacturer and supplier of technology solutions for the energy industry. The company currently holds a Zacks Rank #4 (Sell).
Meanwhile one can consider better-ranked players from the same industry such as Matrix Service Company (MTRX), Profire Energy, Inc. (PFIE) and Dril-Quip, Inc. (DRQ). While Matrix Service and Profire Energy currently sport a Zacks Rank #1 (Strong Buy), Dril-Quip holds a Zacks Rank #2 (Buy).
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