What does FMC Technologies’ share price movement tell us?
FMC Technologies’ (FTI) share price was at its one-year high of ~$44 by the end of April 2015. Since then, it has trended down.
Quarter-over-quarter, FMC Technologies’ net income fall accelerated in 2Q15 and moderated in 3Q15. FTI’s share price, which seemed to be recovering until October 2015 when the 3Q15 financial results were announced, started falling again. In the past year, FMC Technologies’ share price has decreased by 39%.
The VanEck Vectors Oil Services ETF (OIH), an ETF tracking index of 25 OFS companies, has declined by 33% in the past year. The US rig count decreased more than 60% during the same period, affecting the entire oilfield equipment and services (or OFS) industry negatively.
Weatherford International (WFT), FTI’s peer, has declined 40% in the past year. Compared to FTI’s $5.41 billion market capitalization, WFT’s market capitalization currently stands at $5.43 billion. FMC Technologies comprises 0.17% of the Guggenheim S&P 500 Equal Weight ETF (RSP).
Analyzing factors that can affect FMC Technologies’ performance
In the past three quarters until 3Q15, FMC Technologies’ backlog decreased. Its management believes that continued uncertainty in energy prices and lower capital spending by the operators could continue to put Subsea orders under pressure in 2016. For FMC Technologies, North American onshore drilling activity decline has hit its Surface Technologies segment severely, while lower demand affected its measurement solutions business.
The Subsea segment can provide some resistance to FTI’s overall revenue and income fall, following the receipt of some major awards in this category. In January 2015, FMC Technologies received a $180 million contract for a subsea project in Western Australia. Please read Market Realist’s article Is Recovery in Sight for FMC Technologies? to learn about FMC Technologies in depth.
Next, we will discuss Wall Street analysts’ targets for FMC Technologies.