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What's in the Offing for TechnipFMC (FTI) in Q2 Earnings?
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Oilfield services company TechnipFMC plc (FTI - Free Report) is set to release its second-quarter 2017 results on Jul 26, after the closing bell.
A leading manufacturer and supplier of technology solutions for the energy industry, TechnipFMC offers subsea, surface, onshore and offshore solutions for oil and gas projects.
In the preceding three-month period, the London-based company reported better-than-expected operating earnings on the back of strong project execution, efficiencies from its industry-leading solutions and cost-reduction efforts. Coming to its earnings surprise history, TechnipFMC reported a positive average earnings surprise of 46.88% for the trailing four quarters.
Let’s see how things are shaping up for this announcement.
TechnipFMC is well positioned in the subsea systems market, which is its largest business in terms of revenue generation. The company boasts a strong backlog, which reflects steady demand from customers and allows it to navigate uncertainty better than many of its peers. During the quarter, TechnipFMC was awarded a number of contracts including a three-year well intervention contract in Australia, an integrated EPCI deal from Statoil ASA , Liza subsea equipment contract from Exxon Mobil Corporation (XOM - Free Report) and the Coral south FLNG Project. These are likely to drive the company’s earnings and cash flow. The FLNG contract will further strengthen its position in the floating LNG market.
Further, the rising rig count and activity levels in North America enhance the company’s prospects for the current quarter. Also, President Trump’s exit from the Paris Climate accord provided an impetus to drilling activities.
We also appreciate TechnipFMC’s successful cost-management initiatives and excellent project execution in the wake of weak oil prices. The merger between FMC Technologies and Technip SA completed in Jan 2017 is also expected to result in substantial savings which are likely to strengthen the company’s financials. The merger has also created opportunities by offering unique integrated offshore project solutions.
However, weak oil and gas prices might mar demand for oilfield services. During the second quarter, oil and natural gas prices declined 8.4% and 5%, respectively. Lower commodity prices might lead to reduced exploration and production activities. This could call for lower investments by oil majors which will impact revenues of oilfield service companies. This is also reflected in the share price of Halliburton which witnessed a decline of around 14% in the second quarter. This is also reflected in the share price of TechnipFMC which witnessed a decline of around 16.3% in the second quarter.
Our proven model does not conclusively show that TechnipFMC is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen..
That is not the case here as you will see below.
Zacks ESP: Earnings ESP for the company is 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 37 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter
Zacks Rank: TechnipFMC carries a Zacks Rank #3, which increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult.
Please note that we caution investors against stocks with a Zacks Rank #4 or 5 (Strong Sell) going into the earnings announcement, especially when the company is witnessing negative estimate revisions.
Stock Poised to Beat Earnings
While earnings beat looks uncertain for TechnipFMC, another firm within the same industry C&J Energy Services, Inc. can be considered on the basis of our model, which shows that it has the right combination of elements to beat estimates this quarter:
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What's in the Offing for TechnipFMC (FTI) in Q2 Earnings?
Oilfield services company TechnipFMC plc (FTI - Free Report) is set to release its second-quarter 2017 results on Jul 26, after the closing bell.
A leading manufacturer and supplier of technology solutions for the energy industry, TechnipFMC offers subsea, surface, onshore and offshore solutions for oil and gas projects.
In the preceding three-month period, the London-based company reported better-than-expected operating earnings on the back of strong project execution, efficiencies from its industry-leading solutions and cost-reduction efforts. Coming to its earnings surprise history, TechnipFMC reported a positive average earnings surprise of 46.88% for the trailing four quarters.
Let’s see how things are shaping up for this announcement.
TechnipFMC plc Price and EPS Surprise
TechnipFMC plc Price and EPS Surprise | TechnipFMC plc Quote
Factors to Consider This Quarter
TechnipFMC is well positioned in the subsea systems market, which is its largest business in terms of revenue generation. The company boasts a strong backlog, which reflects steady demand from customers and allows it to navigate uncertainty better than many of its peers. During the quarter, TechnipFMC was awarded a number of contracts including a three-year well intervention contract in Australia, an integrated EPCI deal from Statoil ASA , Liza subsea equipment contract from Exxon Mobil Corporation (XOM - Free Report) and the Coral south FLNG Project. These are likely to drive the company’s earnings and cash flow. The FLNG contract will further strengthen its position in the floating LNG market.
Further, the rising rig count and activity levels in North America enhance the company’s prospects for the current quarter. Also, President Trump’s exit from the Paris Climate accord provided an impetus to drilling activities.
We also appreciate TechnipFMC’s successful cost-management initiatives and excellent project execution in the wake of weak oil prices. The merger between FMC Technologies and Technip SA completed in Jan 2017 is also expected to result in substantial savings which are likely to strengthen the company’s financials. The merger has also created opportunities by offering unique integrated offshore project solutions.
However, weak oil and gas prices might mar demand for oilfield services. During the second quarter, oil and natural gas prices declined 8.4% and 5%, respectively. Lower commodity prices might lead to reduced exploration and production activities. This could call for lower investments by oil majors which will impact revenues of oilfield service companies. This is also reflected in the share price of Halliburton which witnessed a decline of around 14% in the second quarter. This is also reflected in the share price of TechnipFMC which witnessed a decline of around 16.3% in the second quarter.
TechnipFMC plc Price
TechnipFMC plc Price | TechnipFMC plc Quote
Earnings Whispers
Our proven model does not conclusively show that TechnipFMC is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen..
That is not the case here as you will see below.
Zacks ESP: Earnings ESP for the company is 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 37 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter
Zacks Rank: TechnipFMC carries a Zacks Rank #3, which increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult.
Please note that we caution investors against stocks with a Zacks Rank #4 or 5 (Strong Sell) going into the earnings announcement, especially when the company is witnessing negative estimate revisions.
Stock Poised to Beat Earnings
While earnings beat looks uncertain for TechnipFMC, another firm within the same industry C&J Energy Services, Inc. can be considered on the basis of our model, which shows that it has the right combination of elements to beat estimates this quarter:
C&J Energy has an Earnings ESP of +100% and a Zacks Rank #3. The company is anticipated to release earnings on Aug 8. You can see the complete list of today’s Zacks #1 Rank stocks here.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge. With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research. It's not the one you think. See This Ticker Free >>