Bottom 5 OFS Stocks for 4Q17 by Expected Revenue Growth



Will MDR be the laggard by revenue growth?

Analysts expect McDermott International’s (MDR) revenues to register the steepest revenue fall in 4Q17. Its revenues can decrease ~23.0% in 4Q17 over 3Q17.

Due primarily to project delays, particularly in the Middle East and in India, its 4Q17 revenues can deteriorate. Wall Street analysts expect Flotek Industries’ (FTK) revenues to fall ~6.0% in 4Q17 over 3Q17.

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OII’s and FTI’s expected revenue fall

Wall Street analysts expect Oceaneering International (OII) to register the second-highest revenue fall in our oilfield services & equipment (or OFS) set. OII can see an 8.4% revenue decline in 4Q17 compared to 3Q17.

OII’s management expects a negative effect of seasonality, and the reduced level of activity can drag down revenues. Most of the decline is expected to be in the ROV (remotely operated vehicles) and Subsea Project segments.

OII comprises 2.0% of the iShares US Oil Equipment & Services ETF (IEZ). IEZ fell 21.0% in the past year versus the 25.0% fall in OII’s stock price. The S&P 500 Index (SPX-INDEX) has increased 19.0% in the past year.

Sell-side analysts expect Technip FMC (FTI) to witness a 7.7% revenue decrease in 4Q17 over 3Q17. The US land-based rig count may begin to flatten in 2H17.

FTI’s management believes moderate rig count growth and reduced levels of hydraulic fracturing fleet reactivations can result in reduced revenues for FTI. Sell-side analysts expect Fairmount Santrol Holdings’ (FMSA) revenues to remain steady in 4Q17 over 3Q17.

Next, we will find out and discuss the top five OFS companies by expected EBITDA growth in 4Q17.


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