Back to top

Analyst Blog

Leading energy industry service provider FMC Technologies Inc. (FTI - Analyst Report) entered into double five-year contracts with Island Offshore Management AS. Per the agreement, the former will render Light Well Intervention (LWI) services to be used in the North Sea by Statoil ASA (STO - Analyst Report).

The LWI services – which aid in cutting the costs of operation and enhancing oil recovery rate – will be carried out on the existing subsea wells, leading to higher output from mature oil fields.

The contracts, each of which contains two two-year extension options, will be executed following the approval from Statoil's partners. However, the financial terms of the agreement were not disclosed.

FMC’s contracts with Island Offshore are slated to begin once the existing LWI contracts between the companies terminate in 2015. Two Island Offshore vessels – the Island Frontier and the Island Wellserver – will be involved with the execution of the contract activities.

Houston, Texas-based FMC Technologies is a leading manufacturer and supplier of technology solutions and operates 27 manufacturing facilities in 16 countries. The company conducts its operations in three segments: Subsea Technologies, Surface Technologies and Energy Infrastructure.

We believe that FMC Technologies is one of the leading subsea equipment manufacturers with solid earnings growth potential over the next several years on the back of a favorable industry outlook. Other positives for the company include a strong backlog position, growing international operations, technology leadership and efficient execution skills.

However, we maintain a long-term Neutral rating on the stock, given the uncertain commodity price outlook and a soft global economy that continue to weigh on the company. Additionally, competitive market conditions along with weak pricing also make us apprehensive.

FMC Technologies currently retains a Zacks #3 Rank, which is equivalent to a short-term Hold rating.

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
ERBA DIAGNO… ERB 3.80 +7.04%
BANCO DO BR… BDORY 14.74 +5.66%
AIR INDUSTR… AIRI 9.99 +4.15%
EQT MIDSTRE… EQM 98.14 +3.38%
WEATHERFORD… WFT 23.64 +3.10%