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Analyzing FMC Technologies’ Growth Drivers

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FMC Technologies’ revenue

Since 3Q14, FMC Technologies’ (FTI) revenues have decreased 22% through 3Q15. Lower North America drilling activity decreased FTI’s measurement solutions business, and a strengthening US dollar affected FTI’s revenues negatively during this period. On a quarter-over-quarter basis, FTI’s revenue decline picked up again in 3Q15 over the previous quarter, after the fall decelerated in 2Q15 over 1Q15.

Before that, FMC Technologies’ revenue had trended upward from 1Q13 to 4Q14, barring a dip in 1Q14. During this period, FTI’s revenues increased 31%. Revenues increased primarily due to increased deepwater drilling activities, higher conventional wellhead system sales in its surface wellhead business, and higher fluid control business demand in Surface Technologies. In 2014, 72% of FTI’s total revenues were generated from outside the US.

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Growth drivers

FMC Technologies’ (FMC) growth drivers were led by:

  • North American onshore drilling activity declines
  • less favorable pricing in FTI’s onshore operations
  • decreases in FTI’s measurement solutions business

In addition, restructuring charges and impairment charges, following depressed energy prices, can negatively affect FMC Technologies’ net earnings. RPC Inc. (RES), FTI’s peer, switched to a $38 million net loss in 4Q15, compared to $77.6 million net income a year earlier.

FMC Technologies comprises 0.17% of the Guggenheim S&P 500 Equal Weight ETF (RSP). For investors looking for broad-based exposure to the energy sector, energy makes up 7.9% of RSP.

Next, we will discuss what FTI’s share price movements indicate.

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