Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Oil and gas development and production systems and services company FMC Technologies (NYSE:FTI) stock jumped as much as 10% today, closing with a 7.5% gain after a surprise beat on earnings for its first quarter.
So what: Despite the challenging oil and gas drilling environment, FMC's earnings per share of $0.63 came in ahead of the $0.59 average analyst estimate. Total revenue of $1.7 billion was 7% lower than the year-ago period, largely as a result of both heavy reduction in U.S. onshore drilling activity, and the negative impact of the strong U.S. dollar on the company's international sales.
Now what: Even in a weak market, FMC is holding up relatively well, largely on the strength of its $5.5 billion order backlog. Of that total, subsea systems make up $4.8 billion, and management is expecting to add another $3 billion or more in awards in 2015. The company's stock is down more than 35% since last August -- but it's looking like the company is relatively well prepared to ride out the current oil market, as it isn't heavily reliant on U.S. onshore production or development for a large percentage of its sales. Subsea is by far the majority of its business, and if the backlog holds up, FMC Technologies could be a decent "bounce-back" candidate.
The stock is probably going to be pretty volatile, especially if oil prices remain low for a while.
Jason Hall has no position in any stocks mentioned. The Motley Fool recommends FMC Technologies. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.