Deep-water boom pushes FMC profits up 21 percent

Profits rose 21 percent for FMC Technologies in the fourth quarter, as a boom in deepwater drilling and subsea equipment, especially in the Gulf of Mexico, has offset the slowdown in onshore drilling in North America.

The Houston-based energy technology company reported on Tuesday net income attributable to the company of $120.4 million in the fourth quarter, up from $99.2 million for the same time last year. The company reported $1.84 billion in revenue for the fourth quarter, up from $1.5 billion for the same time the previous year and higher than analysts’ $1.72 billion consensus estimate.

“We are pleased to report record full-year subsea revenue and operating profit,” said John Gremp, Chairman and CEO of FMC Technologies in a written statement.

But even with the earnings growth, analysts received the news somewhat negatively, noting that fourth quarter earnings of 50 cents per share were seven cents shy of Wall Street predictions, leaving analysts lackluster about the Houston-based oil and gas equipment supplier.

“We believe FMC Technologies’ 4Q12 earnings release has modestly negative implications for the stock,” wrote James West, an analyst with Barclays’ in an earnings note on Tuesday afternoon. While FMC has a steady flow of subsea equipment bookings for 2013, profit margins for its subsea sector dropped from the previous quarter, West said in the note.

FMC Technologies reported earnings of $430 million on $6.15 billion revenue for 2012, up from $399.8 on $5.10 billion in 2011.

The stock closed at $48.33 on Tuesday evening, down slightly from its $48.55 opening price on Tuesday morning. The company released its earnings results after markets closed.

FMC Technologies announced last week that it received an order from BP to supply water injection subsea equipment for the Thunder Horse field in the Gulf of Mexico and will begin deliveries in the first half of 2013.

At the third quarter call, Gremp warned of the drag produced by weak natural gas prices and the resulting demand slowdown, which has bedeviled other oil and gas equipment suppliers.

“Frac equipment ordered nine to 12 months ago continues to enter the market, albeit at a much slower pace, and as a result, this exasperates the oversupply situation and is depressing demand for new capital orders,” said Gremp at the third quarter call.

The fourth-quarter earning call is scheduled for 8 a.m. CST on Wednesday morning.