Thu, Feb. 26, 6:38 PM
- Credit Suisse says the recent rally in oil prices and in oilfield services stocks (NYSEARCA:OIH) is a classic dead cat bounce, and that as soon as U.S. storage gets full - and it is close - crude prices will fall, bringing expectations and stocks down with it.
- The firm says its sector outlook is increasingly negative as companies report increased pricing pressure, a record drop in the activity barometer of the rig count, and offshore rigs and projects confronting headwinds that could take a couple of years to fix.
- Relevant stocks: SLB, HAL, BHI, CAM, HLX, SPN, NOV, FET, DRQ, FTI, OIS
Thu, Feb. 12, 12:27 PM
- FMC Technologies (FTI -3.1%) suffers two analyst downgrades - to Neutral from Buy at Citigroup and to Underperform from Neutral at Credit Suisse - after reporting mixed Q4 results and a 10% workforce reduction.
- The analysts say FTI's revenue is coming down more than expected even while management expects resilience in subsea margins during 2015; FTI also declined to outline an expected subsea order range for 2015, and found management unpersuasive that subsea hardware bookings are entering a structural as opposed to cyclical decline against a backdrop of lower oil prices.
Wed, Feb. 11, 9:39 AM
- FMC Technologies (FTI +2.4%) will cut nearly 2,000 jobs in an attempt to reduce costs in the weak oil market, CEO John Gremp said in today's earnings conference call.
- Most of the 10% company-wide job cut will come from North America, the CEO said; FTI had 19.3K employees around the world, with 12,850 in the U.S. at the end of 2013.
- Earlier: FMC Technologies EPS of $0.72.
Tue, Feb. 10, 4:05 PM
Mon, Feb. 9, 5:35 PM
Mon, Feb. 2, 6:55 PM
- Jefferies downgrades nine oil services stocks (NYSEARCA:OIH), noting there is still “material downside” to consensus estimates from lower oil prices.
- Despite its medium-term negative view on oil, Jefferies adds that it expects oil prices to start to recover in 2015 with prices rising to levels that support oil services in 2016; yet the firm does not expect the sector to recover quickly, and sees deepwater drilling particularly sluggish on high costs and “flat-to-modestly-lower activity.”
- Downgraded to Underperform: FTI, NBR, PTEN, RIG.
- Downgraded to Hold: CAM, PES, PDS, SLCA, FMSA.
Fri, Jan. 9, 7:55 AM
- Oil and gas companies could cut E&P spending in North America by 30% or more this year if U.S. crude oil prices continue to trade at $50-$60/bbl, Barclays estimates on the basis of a survey of 225 oil and gas companies.
- The firm expects U.S. onshore rig count to fall by 500 rigs over the year to ~1,250 rigs by the end of 2015.
- Barclays says this is only the seventh time in the 30-year history of its survey that global spending is estimated to fall, adding that spending rose by more than 10% the following year after almost every decline.
- In the oilfield services group (NYSEARCA:OIH), the firm initiates Halliburton (NYSE:HAL), Baker Hughes (NYSE:BHI), National Oilwell Varco (NYSE:NOV) and FMC Tech (NYSE:FTI) at Overweight, and Forum Energy Tech (NYSE:FET) and Dril-Quip (NYSE:DRQ) at Underweight; Schlumberger (NYSE:SLB), Cameron (NYSE:CAM), Weatherford (NYSE:WFT) and Superior Energy (NYSE:SPN) are started at Equal Weight.
- ETFs: XLE, ERX, VDE, XOP, ERY, DIG, DUG, IYE, XES, IEO, IEZ, PXE, FENY, PXJ, RYE, FXN, DDG
Tue, Jan. 6, 10:37 AM
- Citigroup analyst Scott Gruber says now could be time for longer-term investors to bulk up on oil services stocks (NYSEARCA:OIH), taking the contrarian view that falling capital spending forecasts and looming bankruptcies by some E&P companies could portend that the industry’s shakeout is closer at hand.
- Meanwhile, Gruber says oil services stocks tend to stop falling as oil reaches "unsustainably low” levels, and investors appear to be through much of their selling since valuations have fallen so low.
- Oil services companies generally have been hit twice as hard as integrated oil majors during the past three months; related tickers include SLB, HAL, NOV, BHI, CAM, ESV, FTI, HP, TS, OII.
Dec. 19, 2014, 8:29 AM
- FMC Technologies (NYSE:FTI) wins an order from Eni (NYSE:E) to supply subsea production systems for the Italian company's deepwater Block 15/06 East Hub development off Angola.
- The order has an estimated value of $393M in revenue.
- Earlier this week, FTI received an order worth $268M from Chevron to provide susbea equipment for the Agbami field off Nigeria.
Dec. 18, 2014, 9:59 AM
- RBC recommends increasing weightings and exposure to oil service stocks (OIH +2.5%) heading into 2015, as it says oil prices will start to improve in H2 of next year and that oil service stocks typically discount this move by 6-9 months.
- Down cycles such as 2000-02 and 2008-09 suggest North American land drillers and service companies provide the best returns off business cycle lows, RBC says as it expects a similar dynamic this time.
- RBC upgrades Key Energy (KEG +24.6%) and Superior Energy (SPN +7.5%) to Outperform, and downgrades FMC Tech (FTI +1.8%), Franks (FI +4.9%), Oceaneering (OII +0.2%) and Oil States (OIS +2.3%) to Sector Perform; the firm also says since 1985 three of the top five performing stocks off lows have been Patterson-UTI (PTEN +6.6%), Precision Drilling (PDS +4%) and Nabors (NBR +7.2%).
Dec. 17, 2014, 9:53 AM
- FMC Technologies (FTI +2.3%) says it has won a $268M subsea systems contract for the Chevron-led (NYSE:CVX) Agbami deepwater project offshore Nigeria.
- FTI says it has supported the Agbami field development for several years, and the new subsea equipment agreement will provide additional production and help extend the life of the project.
Dec. 1, 2014, 3:19 PM
- A bit late, Guggenheim analyst Darren Gacicia downgrades Seadrill (SDRL -5.5%), Transocean (RIG -4.5%) and Diamond Offshore (DO +3.3%) to Neutral from Buy, finally admitting that downward pressure on oil prices and a potential for capital markets to become shy to fund newbuild deliveries has undercut the tenets of his previous bull thesis.
- SDRL and RIG remain the most levered to deteriorating offshore market conditions, he says, believing SDRL shares may also suffer from an ownership transition from income to value investors and RIG perhaps sharing the same fate, with a 2015 dividend cut likely amid the potential for further asset writedowns.
- At DO, Gacicia sees risk of a dividend cut, rig retirements and deteriorating offshore market fundamentals as negative near-term catalysts; the firm also downgrades Seventy Seven Energy (SSE -16.2%), Cameron (CAM -2.8%), Frank's International (FI -0.1%) and FMC Tech (FTI -0.1%).
- In the space, the analyst prefers drillers with high-quality assets, solid contract coverage and a lack of funding needs, such as Noble Corp. (NE -0.2%) - which also has a buyback catalyst - Atwood Oceanics (ATW -0.1%) and Pacific Drilling (PACD -3.7%).
Nov. 14, 2014, 12:48 PM
- Oil services companies are mostly higher as Halliburton (HAL +1.7%) is indeed in talks to buy Baker Hughes (BHI +0.5%), a deal that would provide a jolt to oilfield services companies contending with falling oil prices: SLB +0.4%, OIS +1.2%, SPN +2.3%, CAM +0.2%, FTI -0.3%, NOV -0.6%.
- Sterne Agee analyst Stephen Gengaro calls a potential HAL-BHI combo a “HAL of a Frac-ing Deal," seeing several positives for HAL including strengthening its relatively weak position in artificial lift and production chemicals which are critical to enhancing HAL’s mature field strategy, enabling it to leverage its unparalleled U.S. pressure pumping logistics chain to enhance the efficiency of BHI’s operations, and providing the opportunity for significant cost savings which likely would total $600M-$750M or more.
- While antitrust concerns could force some divestitures, Gengaro does not believe it would prevent a deal from happening.
- Other potentially attractive M&A targets among oil services companies could include Dril-Quip (DRQ +0.7%), Frank’s International (FI +2.6%) and Oceaneering (OII -0.2%), Simmons & Co. says.
Oct. 21, 2014, 4:59 PM
- FMC Technologies (NYSE:FTI) recorded a 46% increase to Q3 earnings, beating Wall Street expectations, due primarily to a rise in subsea technology sales and its North American high-pressure fluid control business.
- Earnings in FTI's subsea technology segment jumped 69% Y/Y to $204.4M, while income from the surface technology business gained 47% to $109.5M; also, FTI tallied a $5.9B backlog of subsea technology orders.
- "Quarterly subsea margins are at the highest level we have delivered in over four years,” according to FTI CEO John Gremp.
- Issues in-line guidance for FY 2014, seeing EPS of $2.75-$2.85 vs. $2.81 analyst consensus estimate; guidance includes $0.07/share charge related to an inter-company foreign currency transaction in Q3.
Oct. 21, 2014, 4:10 PM
Oct. 20, 2014, 5:35 PM
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FMC Technologies Inc is a provider of technology solutions for the energy industry. It designs, manufactures and services subsea production and processing systems, surface wellhead production systems, measurement solutions and marine loading systems.
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