Earnings Preview: FMC Technologies - Analyst Blog
July 22 2011 - 2:54PM
Zacks
A leading manufacturer and supplier
of technology solutions for the energy industry, FMC
Technologies Inc. (FTI) is expected to report its second
quarter 2011 earnings results on Monday July 25, after the market
closes.
The Zacks Consensus Estimate for
the second quarter is 38 cents per share, with a downside risk of
2.6%, on revenue of $1,184.0 million.
Previous Quarter
Recap
FMC reported first quarter 2011
earnings per share from continuing operations (excluding a tax
benefit of 3 cents) of 32 cents, which lagged the Zacks Consensus
Estimate of 37 cents and the year-ago profit of 40 cents. The
weaker-than-expected results were mainly due to lackluster results
from its ‘Energy Production Systems’ unit.
Revenue of $1,081.9 million fell
short of our expectation of $1,140.0 million but managed to
surpass the first quarter 2010 level of $1,050.3 million.
As of March 31, 2011, the company
had cash and cash equivalents of $376.8 million and long-term debt
of $414.6 million, with a debt-to-capitalization ratio of
22.4%.
Agreement of
Analysts
The analysts exhibit an optimistic
sentiment for FMC for the to-be reported quarter based on its
diversified product portfolio, specialty service capabilities and
proprietary technological expertise.
In the last 30 days, out of the 22
analysts covering the stock, 5 analysts have raised their estimates
for the second quarter 2011, while one analyst slashed the
estimate. In the last 7 days, one analyst has revised its estimate
upward, while one analyst has reduced it.
Magnitude of Estimate
Revisions
With no effect from the earnings
revisions by the analysts in the last 30 days, the Zacks Consensus
Estimate for the second quarter of 2011 remained unchanged at 38
cents. For the past 7 days, the Consensus Estimate for the quarter
dropped by a penny to 38 cents.
Surprise
History
FMC exhibited a mixed earnings
surprise trend over the last four quarters. The company recorded a
minimum surprise of negative 13.51% in first quarter 2011 while a
maximum of 11.43% in second quarter 2010. On average, the earnings
surprise was a negative 1.97%.
Our
Recommendation
We believe that FMC Technologies,
supported by its dominant market share, technology leadership and
efficient execution skills, remains better positioned to navigate
the uncertain environment better than other industry players.
Texas-based FMC Technologies faces
stiff competition from with peers such as Cameron
International Corporation (CAM) and Oil States
International (OIS). Moreover, with markets remaining
competitive and pricing likely to be weak, we believe FTI shares
are fairly valued and expect them to perform in line with the
broader market. We are maintaining a long-term Neutral rating on
the stock.
CAMERON INTL (CAM): Free Stock Analysis Report
FMC TECH INC (FTI): Free Stock Analysis Report
OIL STATES INTL (OIS): Free Stock Analysis Report
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