TechnipFMC (FTI) Q3 Earnings and Sales Beat Estimates
TechnipFMC FTI reported third-quarter 2023 adjusted earnings of 21 cents per share, which beat the Zacks Consensus Estimate of 19 cents. The bottom line also improved from the year-ago quarter’s level of 3 cents. The improvement can be attributed to better-than-expected performance in the Subsea and Surface Technologies segments.
Revenues of $2.1 billion beat the Zacks Consensus Estimate by 3.7%. The top line also increased from the year-ago quarter’s reported figure of $1.7 billion. This was primarily due to a higher revenue contribution from the aforementioned segments.
Giving some respite to investors, FTI’s third-quarter inbound orders increased 16% from the year-ago period’s level to $2.15 billion, reflecting strong revenue visibility.
Also, the company’s backlog rose. As of September end, TechnipFMC’s order backlog totaled $13.23 billion, up about 49.7% from that recorded a year ago.
TechnipFMC plc Price, Consensus and EPS Surprise
TechnipFMC plc price-consensus-eps-surprise-chart | TechnipFMC plc Quote
Segmental Analysis
Subsea: Revenues from this segment totaled $1.71 billion, up 20.7% from the year-ago quarter’s recorded figure of $1.41 billion. The figure also beat our projection of $1.57 billion. This was primarily due to an increase in project activities in Norway and Brazil.
Adjusted EBITDA amounted to $257.8 million, up about 40.3% from the year-ago quarter’s level. The figure also beat our estimate of $217.7 million.Inbound orders increased 30.5% from the prior-year period’s level to $1.83 billion. The backlog rose 58.8%.
Surface Technologies: This segment recorded revenues of $348.6 million, up 9.6% year over year. However, the figure missed our projection of $367 million.
The unit’s adjusted EBITDA increased 22.3% to $49.9 million. The figure beat our estimate of $46.2 million. The segment’s inbound orders fell 29.4% year over year. The quarter-end backlog decreased 6.5% during the same time frame.
Financials
TechnipFMC reported $1.89 million in costs and expenses, up 14.5% from the year-ago quarter’s recorded figure of $1.65 million.
During the reported quarter, the company spent $43.6 million on capital programs. As of Sep 30, it had cash and cash equivalents worth $690.9 million and long-term debt of $933.5 million, with a debt-to-capitalization of 23.3%.
2023 Outlook
TechnipFMC retained its revenue expectations from the Subsea unit in the $5.9-$6.3 billion range. It also maintained its revenue guidance for the Surface Technologies unit between $1.3 billion and $1.45 billion. The adjusted EBITDA margin is anticipated in the 12.5-13.5% range for the Subsea segment, and the same for the Surface Technologies segment is projected between 12% and 14%.
The company reiterated its free cash flow generation guidance in the band of $225-$375 million for 2023. It also maintained its annual capital expenditure projection of $250 million and net interest expense guidance of $100-$110 million. TechnipFMC anticipates net corporate expenses to be in the range of $100-$110 million and tax provisions in the band of $155-$165 million.
Zacks Rank and Other Key Picks
Currently, FTI carries a Zack Rank #2 (Buy).
Investors interested in the energy sector might look at some other top-ranked stocks like CVR Energy CVI and USA Compression Partners USAC, each sporting a Zacks Rank #1 (Strong Buy), and Harbour Energy HBRIY, carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
CVR Energy is valued at $3.12 billion. In the past year, its shares have lost 19.6%.
CVI currently pays a dividend of $2 per share or 6.45% on an annual basis. Its payout ratio currently sits at 30% of earnings.
USA Compression Partners is valued at around $2.44 billion. USAC currently pays a dividend of $2.10 per unit, or 8.47% on an annual basis.
USAC provides natural gas compression services and offers compression services to oil companies and independent producers, processors, gatherers, and transporters of natural gas and crude oil. It also operates stations.
Harbour Energy is worth approximately $2.28 billion. HBRIY currently pays a dividend of 21 cents per share, or 6.76% on an annual basis.
The company's activities include acquiring, exploring, developing, and producing oil and gas reserves. It has ownership stakes in several properties in the United Kingdom, Norway, Indonesia, Vietnam and Mexico.
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