Oil drilling equipment maker FMC Technologies Inc. (FTI) has been contracted by Petroleo Brasileiro S.A. or Petrobras (PBR) for the delivery of three subsea boosting stations to the Parque das Baleias project, at Espirito Santo in the Campos Basin, offshore Brazil. The contract is valued at approximately $40 million.
FTI has a long history of business with Brazil’s state-run energy major. The Horizontal Boosting Station is the third of its kind that it will be implementing for Petrobras. Prior deals include a four-year subsea tools supply agreement in Mar 2012 and a contract to supply subsea trees for the pre-salt fields, offshore Brazil sealed earlier this month.
Particularly well positioned in the subsea systems market, Houston, Texas-based, FTI has successfully completed several projects with other big names such as Statoil ASA (STO) and Royal Dutch Shell plc (RDS.A).
Last week, FTI reported second quarter 2013 diluted earning per share of 48 cents beating the Zacks Consensus Estimate of 47 cents. Revenues were up 14.3% year over year primarily on the strength shown by its subsea business. The backlog of $6.7 billion further enhances FTI’s healthy frame.
However, the 32% decrease in operating profit in the Surface Technologies segment due to lesser activity in the North American and Canadian regions is an area of concern. The company’s growth prospect might be further dampened by its dependence on the international market which may be affected by macroeconomic factors.
All these factors currently positions FMC Technologies to a Zacks Rank #3 (Hold), implying that it is expected to perform in line with the broader U.S. equity market over the next 1 to 3 months.
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