Zacks Industry Rank Analysis Highlights: Arch Coal, FMC Technologies, Foundation Coal, Global Industries and Oceaneering International.

CHICAGO -- Zacks.com releases the latest Zacks Industry Rank. Stocks featured in this week's analysis include Arch Coal (NYSE:ACI), FMC Technologies (NYSE:FTI), Foundation Coal (NYSE:FCL), Global Industries (Nasdaq:GLBL) and Oceaneering International (NYSE:OII). To see the Zacks Industry Rank and the trend in earnings estimates revisions for all 208 industry groups, visit http://at.zacks.com/?id=2563.

Zacks Industry Rank Analysis written by Charles Rotblut, CFA, Senior Market Analyst for Zacks.com.

Last week, I discussed the strength among oilfield companies. The same day my report went live, FMC Technologies (NYSE:FTI) delivered a very bullish first-quarter report. The company reported earnings that were 23 cents above expectations (67 cents versus 44 cents per share). In addition, FTI revised its full-year profit guidance to between $2.60 and $2.80 per share from between $2.20 and $2.40 per share. Demand for subsea systems, surface systems and fluid control drove the results.

FTI is a member of the Oil Field Machinery & Equipment group. Several companies in the Oil & Gas Field Services group have also delivered strong reports this month. Oceaneering International (NYSE:OII) said first-quarter profits totaled 93 cents per share, 20 cents above expectations. Like FTI, OII benefited from strong demand for its subsea services and products. Oceaneering also boosted its full-year outlook and now expects earnings of $3.60 to $3.90 per share, 25% above its previous guidance. All three covering analysts raised their estimates in response. Global Industries (Nasdaq:GLBL) topped first-quarter estimates by a nickel with earnings of 16 cents per share. Increased business in the Gulf of Mexico, West Africa and the Middle East boosted profits. Three of the four covering analysts have raised their full-year forecasts on GBL.

Although FTI, OII and GLBL directly benefited from hurricane-related business, all of the aforementioned companies are thriving because of overall strength within the energy sector. High oil prices have resulted in increased spending on maintenance. In addition, as oil and gas companies focus more on exploration and production, demand for oilfield parts and services rises. To put another way, oilfield companies are supplying the pans to black gold miners.

Speaking of mining, the Coal industry group has two Zacks #1 Rank stocks: Arch Coal (NYSE:ACI) and Foundation Coal (NYSE:FCL). ACI topped first-quarter estimates by 25 cents with profits of 85 cents per share. FCL beat first-quarter estimates by 17 cents with profits of 67 cents per share. More importantly, both companies reported increases in average per ton margins, which translates into more earning power. Coal prices are being elevated by worldwide economic growth, below average inventories in the U.S. and higher oil prices. The full-year consensus estimates on ACI and FCL have been revised upward by more than 10% over the past 30 days.

As of the end of last week, approximately 75% of the companies within the Zacks Rank universe(a) have reported first-quarter results. Positive earnings surprises are exceeding negative surprises by a ratio of 1.8:1, a slight deterioration from the fourth-quarter. The ratio of positive sales surprises to misses(b) is stable at 1.6:1.

The trend in earnings estimate revisions remains slightly negative. Analysts have cut forecasts on 32 more companies than they have raised forecasts on(c). The average change(d) in full-year estimates is -1.4%. Growth prospects remain very positive, however, with analysts projecting the average company within the Zacks Rank universe to increase profits by 22.6% this year(e).

To see the complete analysis and listing of the Zacks Sector Rank and Industry Rank scores, go to http://at.zacks.com/?id=2563.

(a)The Zacks Rank is assigned to companies with earnings estimates made available by brokerage analysts. The Zacks' database contains earnings estimates for approximately 4400 companies.

(b)Since sales estimates are not available for all companies, the sample size is smaller. As of last Friday, sales estimates were only available on 2650 of the 3215 companies within the Zacks Rank universe that have reported so far.

(c)Revisions in estimates are tracked for the four-week period following a company's earnings report. The rationale behind the four-week period is to measure analysts' reactions to a company's quarterly report.

(d)To prevent the impact of skewing caused by outliers, this number reflects of average of 90% of the companies of the companies that have reported. When the top and bottom 5% are included, the average change in estimates is -8.9%.

(e)The growth rate is calculated on the groups of Zacks Rank stocks that have reported first-quarter earnings, excluding outliers. Including the top and bottom 5% causes the average growth rate to jump to 44.2%. There are 18 companies with projected growth rates in excess of 1000%.

About Zacks Industry Rank and the Zacks Rank

Zacks Industry Rank is calculated by averaging the Zacks Rank for all covered companies within a given industry. The Zacks Rank is assigned to approximately 4400 stocks and ranges from #1 ("Strong Buy") to #5 ("Strong Sell"). Both the Zacks Industry Rank and the Zacks Rank are quantitative indicators designed to cover periods of 1-3 months.

For over 18 years, the Zacks Rank has proven that "Earnings estimate revisions are the most powerful force impacting stock prices." Since inception in 1988, #1 Rank stocks have generated an average annual return of +33%. During the 2000-2002 bear market, Zacks #1 Rank stocks gained +43.8%, while the S&P 500 tumbled -37.6%. Also note that the Zacks Rank system has just as many Strong Sell recommendations (Rank #5) as Strong Buy recommendations (Rank #1). Since 1988, Zacks Rank #5 stocks have underperformed the S&P 500 by 129.7% annually (+5.2% vs. +11.9%). Thus, the Zacks Rank system allows investors to truly manage portfolio trading effectively.

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(f) The Zacks Performance Rank performance is the total return of equal weighted simulated portfolios consisting of those stocks with the indicated Zacks Rank net of fees. Results reflect the reinvestment of dividends and other earnings. Simulated results do not represent actual trading and may not reflect the impact that economic and market factors might have had on decision-making if an adviser were actually managing a client's money.

(g) The S&P 500 Index ("S&P 500") is a well-known, unmanaged index of the prices of 500 large-company common stocks selected by Standard & Poor's. The S&P 500 includes the reinvestment of all dividends, no transaction costs, and represents the gross returns before management fees.

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