FMC Technologies (FTI) Q3 Earnings Top Despite Oil Slump
Zacks Investment Research | Oct 19, 2016 09:03PM ET
Oil drilling equipment maker FMC Technologies Inc. (NYSE:FTI) reported third-quarter adjusted earnings per share of 35 cents, ahead of the Zacks Consensus Estimate of 23 cents. The results were driven by cost reduction efforts.
However, a steep contraction in project activity in the wake of plunging oil prices meant that the company’s bottom line fell sharply from the year-ago level of 61 cents.
Revenues at $1,091.2 million were down 29% year over year and also came below the Zacks Consensus Estimate of $1,157.0 million.
Segmental Analysis
Subsea Technologies: FMC Technologies – which is currently in the process of combining with Paris-based offshore oil and gas field developer Technip (PA:TECF) SA (OTC:TKPPY) – is particularly well positioned in the subsea technologies market, where it competes with a larger rival Schlumberger Ltd.’s (NYSE:SLB) Cameron group.
The segment revenue for the most recent quarter was $798.4 million, reflecting a decrease of 27% from the third quarter of 2015 as reduced capital spending by energy players resulted in lower inbound orders and backlog.
Operating profit came in at $119.7 million, down 30% year over year. The negative comparison reflects tough market conditions.
Surface Technologies: Segment revenues were down 40% year over year to $218.1 million. The main reason for the deteriorating performance can be attributed to sharply lower North American activity on slipping rig count.
As a result, the unit reported an operating loss of $21.7 million. However, savings from significant restructuring actions meant that the loss narrowed from the year-ago period.
Energy Infrastructure: The segment revenue for the July to September period was $77.1 million, 21% below the third-quarter 2015 figure of $97.1 million on lower activity.
However, cost actions helped the company to eke out a small profit of $2.5 million from the division against a loss of $2 million a year ago.
FMC TECH INC Price, Consensus and EPS Surprise
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