FMC Technologies (FTI) makes the products that help oil companies recover oil from the increasingly difficult places it is found, such as deep below the sea. As oil demand rises in the developing world, experts expect higher per barrel pricing to finance increased spending on technology to secure oil production. That should benefit high-tech suppliers such as FMC.
FMC Technologies is a global provider of technology solutions for the energy industry. It designs, manufactures and services technologically sophisticated systems and products, including subsea production and processing systems, surface wellhead production systems, high pressure fluid control equipment, measurement solutions and marine loading systems for the energy industry.
Its subsea technologies segment designs and manufactures products and systems and provides services used by oil and gas companies involved in deepwater exploration and production of crude oil and natural gas. FMC Technologies’ production systems control the flow of oil and gas from producing wells.
“We specialize in offshore production systems and have manufacturing facilities near the world’s principal offshore oil and gas producing basins,” FMC management noted in a recent filing.
An important area is subsea systems. FMC systems are placed on the seafloor and are used to control the flow of crude oil and natural gas from the reservoir to a host processing facility, such as a floating production facility, a fixed platform or an onshore facility. Subsea systems represented approximately 64 percent consolidated revenue in 2011.
Finally, the company also makes multi-phase meters (MPMs), whose applications include production and surface well testing, reservoir monitoring, remote operation, fiscal allocation, process monitoring and control, and turbine and compressor monitoring. “The MPM product line augments our portfolio of technologies for optimizing oil and gas recovery,” management said.
FMC Technologies has a market cap of $10.07 billion in a sector, energy equipment and services, where the average company size is $5.8 billion. Its trailing 12-month P/E ratio is 24.64 and its five-year projected price-to-earnings-growth (PEG) ratio is 1.9, compared to 0.85 for the sector.
Its projected earnings per share growth for the coming year is 25.94 percent, compared to a sector average of 29.37 percent.
Analysts are generally bullish on FTI, with buy or outperform calls in from Citigroup Investment Research, JP Morgan, Standard & Poor’s Equity Research, Raymond James, and Friedman, Billings, Ramsey & Co.
“As deepwater wells age (such as in the North Sea), interventions needed to sustain production are likely to become more important, in our view, and FTI, with a leading market share in subsea capital equipment, appears to us to be well positioned to offer such services,” noted S&P analysts in a report in late April.
FMC Technologies next reports on July 24.
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