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TheStreet Open House

Why FMC Technologies (FTI) Stock Is Up Today

Stocks in this article: FTI

NEW YORK (TheStreet) -- FMC Technologies (FTI) was gaining 5.5% to $58.48 Wednesday after beating analysts' expectations for earnings and revenue in the first quarter.

For the first quarter FMC Technologies posted earnings of 57 cents a share, beating analysts' estimates of 50 cents a share by 7 cents. Revenue grew 10.3% from the year-ago quarter to $1.82 billion in the quarter. Analysts surveyed by Thomson Reuters expected revenue of $1.80 billion for the quarter.

Revenue from Subsea Technologies grew 10% in the quarter to $1.2 billion. The company reported total inbound orders of $2.6 billion, including $1.9 billion in Subsea Technologies orders. Subsea Technologies backlog as $6.8 billion.

"As a result of strong orders in the quarter, Subsea Technologies achieved record backlog," chairman, president, and CEO John Gremp said in a press release. "We delivered solid subsea revenue and operating profit and expect to see this trend continue throughout the remainder of the year."

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TheStreet Ratings team rates FMC TECHNOLOGIES INC as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:

"We rate FMC TECHNOLOGIES INC (FTI) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth, compelling growth in net income, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • FTI's revenue growth has slightly outpaced the industry average of 8.3%. Since the same quarter one year prior, revenues rose by 11.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • FMC TECHNOLOGIES INC has improved earnings per share by 48.0% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, FMC TECHNOLOGIES INC increased its bottom line by earning $2.10 versus $1.78 in the prior year. This year, the market expects an improvement in earnings ($2.63 versus $2.10).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Energy Equipment & Services industry average. The net income increased by 47.7% when compared to the same quarter one year prior, rising from $120.40 million to $177.80 million.
  • Net operating cash flow has significantly increased by 157.79% to $370.20 million when compared to the same quarter last year. In addition, FMC TECHNOLOGIES INC has also vastly surpassed the industry average cash flow growth rate of 23.52%.
  • Despite currently having a low debt-to-equity ratio of 0.59, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.95 is weak.
  • You can view the full analysis from the report here: FTI Ratings Report

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Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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