Why Forum Energy Is Poised to Keep Plunging

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, Forum Energy Technologies (NYSE: FET  ) , which provides manufactured technologies to the energy sector, has received a distressing two-star ranking.

With that in mind, let's take a closer look at Forum Energy and see what CAPS investors are saying about the stock right now.

Forum Energy facts



Market Cap

$2.0 billion


Oil and gas equipment and services

Trailing-12-Month Revenue

$1.4 billion


Chairman/CEO C. Christopher Gaut (since 2010)
CFO James Harris (since 2010)

Trailing-12-Month Return on Equity



$17.9 million / $318.7 million


Cameron International (UNKNOWN: CAM.DL  )
FMC Technologies
National Oilwell Varco

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 20% of the 15 members who have rated Forum Energy believe the stock will underperform the S&P 500 going forward.

Just yesterday, one of those Fools, mdriver78, highlighted Forum Energy's fourth-quarter outlook as particularly worrisome:

Downward guidance is seldom received well by the market. And the information indicated in the release seems to indicate some core business concerns. The [company] indicated the reduction in the expected range for full year 2012 earnings per diluted share is primarily the result of:

-- Significantly lower fourth quarter 2012 customer spending on capital equipment and consumable products than previously anticipated, especially in the company's Drilling product line.

-- Customer deferrals in accepting delivery of higher margin capital equipment orders from existing backlog.

-- Under absorption of manufacturing costs.

- -Acquisition transaction expenses, severance, weather related inefficiencies, and other transitory costs.

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