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FMC Technologies (FTI) Down 3.7% Since Last Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for FMC Technologies (FTI - Free Report) . Shares have lost about 3.7% 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 the most recent earnings report in order to get a better handle on the important drivers.
Second-Quarter 2018 Results
TechnipFMC plc reported second-quarter 2018 earnings on a diluted basis (excluding one-time items) of 28 cents a share, missing the Zacks Consensus Estimate of 39 cents. Moreover, the bottom line fell short of the year-ago adjusted earnings of 45 cents a share.
Second-quarter revenues came in at $2,960.9 million, which lagged the Zacks Consensus Estimate of $3,219 million and also decreased 23% from the prior-year figure of $3,845 million.
The quarterly results were primarily affected due to the completion of some of the company’s key projects in Asia Pacific, Africa, and North America regions, along with prior periods’ diminishing inbound orders, especially in the Subsea segment. The negatives were partially offset by improvement in the Surface Technologies segment.
As of Jun 30, 2018, TechnipFMC’s total backlog was $14,871.8 million compared with $15,182.9 million a year ago, reflecting a decline of more than 2%.
Total inbound orders of $4,231.7 million in the quarter, up 34.2% year over year, set a new record for the company.
Segmental Analysis
Subsea: The segment’s revenues in the second quarter were $1,217.4 million, reflecting a decrease of 29.6% from the year-ago figure of $1,730.3 million. Operating profit came in at $75.9 million, down 67.9% year over year. Inbound orders in the quarter fell 14.5% year over year to $1,516.2 million. The segment’s backlog marginally declined from $6,186.8 million in the year-ago quarter to $6,177 million in second-quarter 2018.
With key projects nearing completion in Asia Pacific, Africa, and North America, combined with prior periods’ diminishing inbound orders triggered by the energy downturn, the segment’s results were affected.
Onshore/Offshore: This segment generated revenues of $1,342.4 million, down 26% from the prior-year quarter. Operating profit fell to $171.3 million from $204.5 million recorded in the second quarter of 2017. While inbound orders rose 108.5% year over year to $2,300.8 million in the quarter, backlogs fell 3.5% from the year-ago period to $8,279.5 million.
The segment’s results were negatively impacted by the completion of some key projects, partly offset by increased activities as well as project execution in the Asia Pacific and EMIA (Europe, Middle East, India and Africa) regions.
Surface Technologies: The segment’s revenues in the second quarter were $401.1 million, up 33.7% from second-quarter 2017 figure of $300 million. The increase is primarily attributed to the rising momentum in the North American market, as well as increased demand for hydraulic fracturing and other services. Further, higher global activity levels, rebounding prices in North America and enhanced cost structure helped the company report operating profit of $51.5 million against operating loss of $1 million incurred a year ago. Inbound orders in the quarter rose 50.1% year over year to $414.7 million. The segment’s backlog marginally increased from $414.1 million in the year-ago quarter to $415.3 million in second-quarter 2018.
Capex & Balance Sheet
In the reported quarter, TechnipFMC spent $81.6 million on capital programs. As of Jun 30, the company had cash and cash equivalents of $5,555.4 million and long-term debt of $3,787.5 million, with a debt-to-capitalization ratio of 22.6%.
Dividend
The board of directors declared a quarterly cash dividend of 13 cents per share, payable on Sep 5, 2018 to its shareholders of record as of Aug 21, 2018.
Guidance
TechnipFMC projects revenues for the Onshore/Offshore segment in the range of $5.6-$5.9 billion in 2018 (up from earlier expectation of $5.3-5.7 billion), with an EBITDA margin of 12% (at least), higher than the prior guidance of 11.5%. The company reiterated its guidance for the other two segments. The Surface Technologies segment is expected to generate revenues between $1.5 billion and $1.6 billion, with EBITDA margin of 17.5%. The company projects its subsea revenues within $5-$5.3 billion, with EBITDA margin of 14%. Capex for 2018 is estimated to be around $300 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
VGM Scores
At this time, FMC Technologies has a poor Growth Score of F, however its Momentum is doing a bit better with a D. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable solely for value based on our styles scores.
Outlook
Estimates have been broadly trending upward for the stock and the magnitude of these revisions looks promising. Notably, FMC Technologies has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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FMC Technologies (FTI) Down 3.7% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for FMC Technologies (FTI - Free Report) . Shares have lost about 3.7% 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 the most recent earnings report in order to get a better handle on the important drivers.
Second-Quarter 2018 Results
TechnipFMC plc reported second-quarter 2018 earnings on a diluted basis (excluding one-time items) of 28 cents a share, missing the Zacks Consensus Estimate of 39 cents. Moreover, the bottom line fell short of the year-ago adjusted earnings of 45 cents a share.
Second-quarter revenues came in at $2,960.9 million, which lagged the Zacks Consensus Estimate of $3,219 million and also decreased 23% from the prior-year figure of $3,845 million.
The quarterly results were primarily affected due to the completion of some of the company’s key projects in Asia Pacific, Africa, and North America regions, along with prior periods’ diminishing inbound orders, especially in the Subsea segment. The negatives were partially offset by improvement in the Surface Technologies segment.
As of Jun 30, 2018, TechnipFMC’s total backlog was $14,871.8 million compared with $15,182.9 million a year ago, reflecting a decline of more than 2%.
Total inbound orders of $4,231.7 million in the quarter, up 34.2% year over year, set a new record for the company.
Segmental Analysis
Subsea: The segment’s revenues in the second quarter were $1,217.4 million, reflecting a decrease of 29.6% from the year-ago figure of $1,730.3 million. Operating profit came in at $75.9 million, down 67.9% year over year. Inbound orders in the quarter fell 14.5% year over year to $1,516.2 million. The segment’s backlog marginally declined from $6,186.8 million in the year-ago quarter to $6,177 million in second-quarter 2018.
With key projects nearing completion in Asia Pacific, Africa, and North America, combined with prior periods’ diminishing inbound orders triggered by the energy downturn, the segment’s results were affected.
Onshore/Offshore: This segment generated revenues of $1,342.4 million, down 26% from the prior-year quarter. Operating profit fell to $171.3 million from $204.5 million recorded in the second quarter of 2017. While inbound orders rose 108.5% year over year to $2,300.8 million in the quarter, backlogs fell 3.5% from the year-ago period to $8,279.5 million.
The segment’s results were negatively impacted by the completion of some key projects, partly offset by increased activities as well as project execution in the Asia Pacific and EMIA (Europe, Middle East, India and Africa) regions.
Surface Technologies: The segment’s revenues in the second quarter were $401.1 million, up 33.7% from second-quarter 2017 figure of $300 million. The increase is primarily attributed to the rising momentum in the North American market, as well as increased demand for hydraulic fracturing and other services. Further, higher global activity levels, rebounding prices in North America and enhanced cost structure helped the company report operating profit of $51.5 million against operating loss of $1 million incurred a year ago. Inbound orders in the quarter rose 50.1% year over year to $414.7 million. The segment’s backlog marginally increased from $414.1 million in the year-ago quarter to $415.3 million in second-quarter 2018.
Capex & Balance Sheet
In the reported quarter, TechnipFMC spent $81.6 million on capital programs. As of Jun 30, the company had cash and cash equivalents of $5,555.4 million and long-term debt of $3,787.5 million, with a debt-to-capitalization ratio of 22.6%.
Dividend
The board of directors declared a quarterly cash dividend of 13 cents per share, payable on Sep 5, 2018 to its shareholders of record as of Aug 21, 2018.
Guidance
TechnipFMC projects revenues for the Onshore/Offshore segment in the range of $5.6-$5.9 billion in 2018 (up from earlier expectation of $5.3-5.7 billion), with an EBITDA margin of 12% (at least), higher than the prior guidance of 11.5%. The company reiterated its guidance for the other two segments. The Surface Technologies segment is expected to generate revenues between $1.5 billion and $1.6 billion, with EBITDA margin of 17.5%. The company projects its subsea revenues within $5-$5.3 billion, with EBITDA margin of 14%. Capex for 2018 is estimated to be around $300 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
VGM Scores
At this time, FMC Technologies has a poor Growth Score of F, however its Momentum is doing a bit better with a D. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable solely for value based on our styles scores.
Outlook
Estimates have been broadly trending upward for the stock and the magnitude of these revisions looks promising. Notably, FMC Technologies has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.