Why FMC Technologies (FTI) Was Downgraded

NEW YORK (TheStreet) -- FMC Technologies (FTI) was downgraded to "market perform" from "outperform" by William Blair Monday.

FMC Technologies was gaining 0.2% to $48.46 in morning trading.

The firm says the oil and gas company lacks any near-term catalysts. William Blair analysts say they prefer companies with less deep-water exposure than FMC Technologies.

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

"We rate FMC TECHNOLOGIES INC (FTI) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. 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, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."

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

  • FTI's revenue growth has slightly outpaced the industry average of 8.1%. 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 ($2.76 versus $2.10).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Energy Equipment & Services industry. 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.
  • 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 0.94 is weak.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Energy Equipment & Services industry and the overall market, FMC TECHNOLOGIES INC's return on equity exceeds that of both the industry average and the S&P 500.

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