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TechnipFMC (FTI) Reports Loss in Q3, Misses on Revenues

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TechnipFMC plc FTI reported third-quarter 2021 adjusted loss per share of 6 cents. However, the Zacks Consensus Estimate was a profit of 2 cents. The year-ago quarter reported a profit of 16 cents. This underperformance is due to lower-than-anticipated revenues from both the Subsea and Surface Technologies segments.

Revenues from the Subsea unit totaled $1.3 billion, falling short of the Zacks Consensus Estimate of $1.4 billion. Revenues from the Surface Technologies unit totaled $267.3 million, lagging the Zacks Consensus Estimate of $291 million.

For the quarter ended Sep 30, this seabed-to-surface oilfield equipment and services provider’s revenues of $1.58 billion missed the Zacks Consensus Estimate by 5.55% and also declined from the year-ago quarter’s $3.34 billion.

In the third quarter, TechnipFMC’s inbound orders decreased 24.7% from the year-ago period’s level to $1.4 billion, reflecting a weak revenue visibility.

Also, the company’s backlog was down. As of September-end, TechnipFMC’s order backlog stood at $7 billion, deteriorating 7.7% from the 2020 reading.

Segment Analysis

Subsea: Revenues in the quarter under review were $1.3 billion, down 12.6% from the year-ago sales figure of $1.5 billion due to reduced activities in the North Sea and Asia. Adjusted EBITDA was reported at $146.5 million, reflecting a marginal improvement from the year-ago quarter’s level. Quarterly inbound orders plunged 30.6% to $1.12 billion while backlog fell 7.7%.

Surface Technologies: This smaller segment of the company recorded revenues of $267.3 million, up 18.4% year over year, primarily owing to an increase in North American drilling and completion activity. The unit’s adjusted EBITDA jumped 64.2% to $28.4 million. The segment’s inbound orders rose 20.4% while the quarter-end backlog decreased 7.6%.

TechnipFMC plc Price, Consensus and EPS Surprise

TechnipFMC plc Price, Consensus and EPS Surprise
TechnipFMC plc Price, Consensus and EPS Surprise

TechnipFMC plc price-consensus-eps-surprise-chart | TechnipFMC plc Quote

Financials

In the reported quarter, TechnipFMC spent $47.3 million on capital programs. Cash provided by operations for the quarter came in at $135.9 million. As of Sep 30, the company had cash and cash equivalents of $1.03 billion and a long-term debt of $1.98 billion with debt-to-capitalization of 36.1%.

2021 Outlook

Looking ahead, TechnipFMC maintained its previously announced revenue expectation from the Subsea unit in the $5.2-$5.5 billion range for the current year. It still expects revenues from the Surface Technologies unit in the $1.05-$1.25 billion band for 2021. In the fourth quarter, the firm expects a considerable rise in foreign order activity owing to many multi-year agreements.

This London-based oilfield services provider reaffirmed its free cash flow generation projection for 2021 in the $120-$220 million band. The company reiterated its annual capital expenditure view of $250 million.

Zacks Rank & Key Picks

TechnipFMC currently carries a Zacks Rank #3 (Hold). Some better-ranked players in the energy space are Continental Resources, Inc. CLR, Whiting Petroleum Corporation WLL and Magnolia Oil & Gas Corp MGY, each presently flaunting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Continental Resources’ earnings beat the Zacks Consensus Estimate in three of the previous four quarters, missing the same on one occasion.

Whiting Petroleum’s earnings beat the Zacks Consensus Estimate in all the preceding four quarters.

Magnolia’s earnings beat the Zacks Consensus Estimate in all the last four quarters.


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