FMC Technologies Inc. (FTI), maker of oil drilling equipment, announced that it has entered into a four-year contract with Brazil's state-run energy giant, Petroleo Brasileiro S.A., or Petrobras (PBR).
This recent deal is part of a long-standing business relationship between FMC Technologies and Petrobras. Per the deal, FMC Technologies will purvey equipment commissioning and offshore technical services, for the development of offshore oil fields of Petrobras in Brazil. It will also cater maintenance, modification, storage and logistics services for the fields.
Management reveals that this contract will assist installation of new equipment. The deal is also expected to provide life-of-oil field support services for over 350 subsea trees and manifolds of FMC Technologies, which are already being used by Petrobras in Brazil.
Houston, Texas-based FMC Technologies is a leading manufacturer and supplier of technology solutions for the energy industry. FMC Technologies conducts its operations in three segments: Subsea Technologies, Surface Technologies and Energy Infrastructure.
FMC Technologies’ strong backlog not only reflects a steady demand from its customers but also offers long-term earnings and cash flow visibility. This enables the company to navigate uncertainty better than many of its peers.
However, FMC Technologies relies on its ability to develop and acquire essential products and technologies that drive its operational performance and growth. The company might face operational and financial dilemma if it is unable to bring its products to the market in time or if the technology and products become obsolete.
FMC Technologies currently retains a Zacks Rank #3 (Hold), implying that it is expected to perform in line with the broader U.S. equity market over the next one to three months.
Two oil field machinery and equipment suppliers that are expected to outperform the broader U.S. equity market over the next one to three months are Natural Gas Services Group Inc. (NGS) and USA Compression Partners LP (USAC). Both the stocks currently carry a Zacks Rank #2 (Buy).
More From Zacks.com