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Why Is FMC Technologies (FTI) Down 9.8% Since Last Earnings Report?
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It has been about a month since the last earnings report for FMC Technologies (FTI - Free Report) . Shares have lost about 9.8% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is FMC Technologies due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
TechnipFMC Q4 Earnings Miss Estimates, Revenues Top
TechnipFMCplc’s fourth-quarter 2020 adjusted earnings of 5 cents per share missed the Zacks Consensus Estimate of 21 cents. This underperformance was primarily caused by weak revenue contribution from the company’s Subsea and Surface Technologies units.
However, the bottom line surged 66.6% from the year-earlier quarter's adjusted earnings of 3 cents owing to better-than-expected profit from the Technip Energies segment. Also, adjusted EBITDA of $194 million from the segment outperformed the Zacks Consensus Estimate of $176 million.
In the quarter ended Dec 31, the company’s revenues of $3.43 billion surpassed the Zacks Consensus Estimate of $3.34 billion. However, the top line declined from the year-ago quarter’s $3.73 million.
In the fourth quarter, this seabed-to-surface oilfield equipment and services provider’s inbound orders improved 54.7% from the year-ago period to $4.20 billion.
However, the company’s backlog deteriorated in the same period. The metric was $21.4 billion, declining 11.8% from the year-ago quarter.
Last month, TechnipFMC announced the closing of its spin-off transaction to split its activities into two independent publicly traded companies — TechnipFMC and Technip Energies.
Per the plan, the company has been separated into two distinct entities, TechnipFMC, a fully integrated technology and service provider, and Technip Energies, which will oversee the engineering and construction activities. Notably, the spinoff (Technip Energies) has started trading under the symbol TE on the Euronext Paris Exchange in February.
Subsea: Revenues in the quarter under review were $1.34 billion, down 10% from the year-ago sales figure of $1.49 billion owing tolower project activity in Norway and Brazil. Moreover, adjusted EBITDA of $116.5 million decreased 37%, attributable to coronavirus-induced unfavorable execution of activity. Quarterly inbound orders and backlog decreased 39.3% and 18.9%, respectively, in the quarter under review.
Technip Energies: Revenues of $1.83 billion inched down 0.4% from the prior-year quarter, due to lower revenue from Yamal LNG and weak activity on projects in the Middle East and North America. In the fourth quarter, this unit reported $194 million as adjusted EBITDA, down from $259.7 million in the prior-year quarter.
Inbound orders skyrocketed 186.4% to $3.2 billion while the segment’s backlog dropped 7.8% year over year to $14.1 billion at the end of the quarter.
Surface Technologies: This is the company’s smallest segment that recorded revenues of $262.3 million, down 35.6% year over year,primarily due to slowdown in North American completions activity as well as drop in international revenue. Adjusted EBITDA tanked 44.7% to $30.9 million due to lower completions-based activity in North America. The segment’s inbound orders and backlog fell 30.4% and 12.6%, respectively, in the quarter under review.
Financials
In the reported quarter, TechnipFMC spent $291.8 million. As of Dec 31, the company had cash and cash equivalents worth $4.81 billion and a long-term debt of $3.32 billion with total debt-to-total capital of 44.4%.
2021 Guidance
TechnipFMC provided the full-year outlook for its operating segments (excluding Technip Energies that will be reported as discontinued operations). The company expects revenues from the Subsea and Surface Technologies units to be $5-$5.4 billion and $1,050-$1,250 million, respectively.
Further, this London-based company expects to generate free cash flows in the $50-$150 million range in 2021. The company now anticipates shelling out $250 million as capital expenditures.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month. The consensus estimate has shifted -194.14% due to these changes.
VGM Scores
At this time, FMC Technologies has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise FMC Technologies has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
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Why Is FMC Technologies (FTI) Down 9.8% Since Last Earnings Report?
It has been about a month since the last earnings report for FMC Technologies (FTI - Free Report) . Shares have lost about 9.8% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is FMC Technologies due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
TechnipFMC Q4 Earnings Miss Estimates, Revenues Top
TechnipFMCplc’s fourth-quarter 2020 adjusted earnings of 5 cents per share missed the Zacks Consensus Estimate of 21 cents. This underperformance was primarily caused by weak revenue contribution from the company’s Subsea and Surface Technologies units.
However, the bottom line surged 66.6% from the year-earlier quarter's adjusted earnings of 3 cents owing to better-than-expected profit from the Technip Energies segment. Also, adjusted EBITDA of $194 million from the segment outperformed the Zacks Consensus Estimate of $176 million.
In the quarter ended Dec 31, the company’s revenues of $3.43 billion surpassed the Zacks Consensus Estimate of $3.34 billion. However, the top line declined from the year-ago quarter’s $3.73 million.
In the fourth quarter, this seabed-to-surface oilfield equipment and services provider’s inbound orders improved 54.7% from the year-ago period to $4.20 billion.
However, the company’s backlog deteriorated in the same period. The metric was $21.4 billion, declining 11.8% from the year-ago quarter.
Last month, TechnipFMC announced the closing of its spin-off transaction to split its activities into two independent publicly traded companies — TechnipFMC and Technip Energies.
Per the plan, the company has been separated into two distinct entities, TechnipFMC, a fully integrated technology and service provider, and Technip Energies, which will oversee the engineering and construction activities. Notably, the spinoff (Technip Energies) has started trading under the symbol TE on the Euronext Paris Exchange in February.
Subsea: Revenues in the quarter under review were $1.34 billion, down 10% from the year-ago sales figure of $1.49 billion owing tolower project activity in Norway and Brazil. Moreover, adjusted EBITDA of $116.5 million decreased 37%, attributable to coronavirus-induced unfavorable execution of activity. Quarterly inbound orders and backlog decreased 39.3% and 18.9%, respectively, in the quarter under review.
Technip Energies: Revenues of $1.83 billion inched down 0.4% from the prior-year quarter, due to lower revenue from Yamal LNG and weak activity on projects in the Middle East and North America. In the fourth quarter, this unit reported $194 million as adjusted EBITDA, down from $259.7 million in the prior-year quarter.
Inbound orders skyrocketed 186.4% to $3.2 billion while the segment’s backlog dropped 7.8% year over year to $14.1 billion at the end of the quarter.
Surface Technologies: This is the company’s smallest segment that recorded revenues of $262.3 million, down 35.6% year over year,primarily due to slowdown in North American completions activity as well as drop in international revenue. Adjusted EBITDA tanked 44.7% to $30.9 million due to lower completions-based activity in North America. The segment’s inbound orders and backlog fell 30.4% and 12.6%, respectively, in the quarter under review.
Financials
In the reported quarter, TechnipFMC spent $291.8 million. As of Dec 31, the company had cash and cash equivalents worth $4.81 billion and a long-term debt of $3.32 billion with total debt-to-total capital of 44.4%.
2021 Guidance
TechnipFMC provided the full-year outlook for its operating segments (excluding Technip Energies that will be reported as discontinued operations). The company expects revenues from the Subsea and Surface Technologies units to be $5-$5.4 billion and $1,050-$1,250 million, respectively.
Further, this London-based company expects to generate free cash flows in the $50-$150 million range in 2021. The company now anticipates shelling out $250 million as capital expenditures.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month. The consensus estimate has shifted -194.14% due to these changes.
VGM Scores
At this time, FMC Technologies has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise FMC Technologies has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.