FMC Technologies’ performance by segment
From fiscal 4Q14 to 4Q15, all of FMC Technologies’ (FTI) segments’ revenues fell. The Surface Technologies segment suffered the biggest revenue decline at 46% while the Subsea Technologies segment was relatively resilient with a 29% fall. These two segments accounted for 93% of FTI’s fiscal 4Q15 revenues.
As far as operating income, the Surface Technologies and Energy Infrastructure segments turned to losses in fiscal 4Q15. In 4Q15, National Oilwell Varco (NOV), FTI’s peer, switched to a $1.6 billion loss compared to a year ago. NOV’s market capitalization stands at $10.5 billion compared to FTI’s $5.4 billion.
Factors that affected FMC Technologies’ fiscal 4Q15 performance
- a $134 million negative impact due to a stronger US dollar
- a lower rig count and pricing pressure on FTI’s services due to weak demand
- a steep decline in exploration and production activity in the North American land market
FMC Technologies’ backlog
FMC Technologies’ contract backlog fell 34% in fiscal 2015 compared to a year earlier. For all three segments combined, the order backlog was $4.4 billion on December 31, 2015. FMC Technologies is 0.03% of the SPDR S&P 500 ETF (SPY).
Views of FMC Technologies’ CEO
FMC Technologies CEO John Gremp expressed his worries over the industry’s outlook. In the fiscal 4Q15 press release, he said, “Lower oil prices and greater uncertainty around operator cash flows are driving another year of customer spending reductions.”
Next, we’ll discuss FMC Technologies’ returns.