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Factors Setting the Tone for TechnipFMC (FTI) in Q2 Earnings
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TechnipFMC plc (FTI - Free Report) is set to release second-quarter 2020 results on Wednesday Jul 29, after the closing bell.
The Zacks Consensus Estimate for the to-be-reported quarter’s profit is 6 cents per share and for revenues is $3.07 billion.
Let’s delve into the factors that might have influenced the company’s June-quarter performance.
Factors to Consider for Q2 Results
TechnipFMC’s consistent cost-management moves make us upbeat. It steadily reins in its capex by curbing its spending levels. For 2020, the company slashed its 2020 capex guidance by 30% to $300 million from its prior projection after taking into account the persistent plunge in commodity prices. Further, this is likely to have boosted the company’s earnings, enabling it to generate higher cash flows in the second quarter.
Additionally, the Technip Energies unit is expected to have gained traction from TechnipFMC’s business of process technology as well as robust activity in Europe. Evidently, the consensus mark for second-quarter revenues from this segment stands at $1.53 billion, suggesting an increase from $1.50 billion reported in the year-ago quarter.
However, on a bearish note, weakness in North American activity due to the coronavirus pandemic, which dwindled the crude price is expected to have affected the Surface segment’s top line. The Zacks Consensus Estimate for the segment implies a 38.7% plunge to $258 million from the prior-year reported figure. Meanwhile, adverse impacts are likely to have been most pronounced during the second quarter as most containment measures and wide-scale ramp-downs in business operations were assumed to take place during this period.
What Does Our Model Say?
Our proven Zacks model predicts an earnings beat for TechnipFMC this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: TechnipFMC has an Earnings ESP of +9.40%.
Zacks Rank: TechnipFMC currently has a Zacks Rank #3, which increases the predictive power of ESP.
Highlights of Q1 Earnings & Surprise History
In the last reported quarter, this London-based company reported adjusted loss of 11 cents per share. Meanwhile, the Zacks Consensus Estimate was of earnings of 22 cents per share. Moreover, the year-earlier quarter's adjusted earnings per share came in at 6 cents. This underperformance can be primarily attributed to the coronavirus-induced vulnerable market scenario and lower-than-anticipated profits from the Technip Energies (previously Onshore/Offshore) segment, which is the major contributor to the company’s bottom line. Also, adjusted EBITDA of $167.1 million from the unit lagged the Zacks Consensus Estimate of $182 million.
Moreover, for the quarter ended Mar 31, the company’s revenues of $3.13 billion missed the Zacks Consensus Estimate by 8.8% but increased 7.5% from $2.9 billion a year ago owing to strong revenue contributions from its Subsea and Technip Energies unit.
As far as earnings surprises are concerned, this manufacturer and supplier of products, services and fully-integrated technology solutions for the energy industry is on a slippery slope. Earnings of the company underperformed the Zacks Consensus Estimate in three of the last four quarterly reports and beat the same in the remaining quarter, the average negative surprise being 76.78%. This is depicted in the graph below:
Here are some other firms worth considering from the energy space on the basis of our model, which shows that these too have the right combination of elements to beat on earnings this season:
National Oilwell Varco, Inc. (NOV - Free Report) has an Earnings ESP of +8.10% and is #3 Ranked at present. The company is scheduled to release earnings on Jul 27.
Oceaneering International, Inc. (OII - Free Report) has an Earnings ESP of +26.39% and a Zacks Rank of 3 at present. The company is scheduled to release earnings on Jul 29.
Zacks’ Single Best Pick to Double
From thousands of stocks, 5 Zacks experts each picked their favorite to gain +100% or more in months to come. From those 5, Zacks Director of Research, Sheraz Mian hand-picks one to have the most explosive upside of all.
With users in 180 countries and soaring revenues, it’s set to thrive on remote working long after the pandemic ends. No wonder it recently offered a stunning $600 million stock buy-back plan.
The sky’s the limit for this emerging tech giant. And the earlier you get in, the greater your potential gain.
Image: Bigstock
Factors Setting the Tone for TechnipFMC (FTI) in Q2 Earnings
TechnipFMC plc (FTI - Free Report) is set to release second-quarter 2020 results on Wednesday Jul 29, after the closing bell.
The Zacks Consensus Estimate for the to-be-reported quarter’s profit is 6 cents per share and for revenues is $3.07 billion.
Let’s delve into the factors that might have influenced the company’s June-quarter performance.
Factors to Consider for Q2 Results
TechnipFMC’s consistent cost-management moves make us upbeat. It steadily reins in its capex by curbing its spending levels. For 2020, the company slashed its 2020 capex guidance by 30% to $300 million from its prior projection after taking into account the persistent plunge in commodity prices. Further, this is likely to have boosted the company’s earnings, enabling it to generate higher cash flows in the second quarter.
Additionally, the Technip Energies unit is expected to have gained traction from TechnipFMC’s business of process technology as well as robust activity in Europe. Evidently, the consensus mark for second-quarter revenues from this segment stands at $1.53 billion, suggesting an increase from $1.50 billion reported in the year-ago quarter.
However, on a bearish note, weakness in North American activity due to the coronavirus pandemic, which dwindled the crude price is expected to have affected the Surface segment’s top line. The Zacks Consensus Estimate for the segment implies a 38.7% plunge to $258 million from the prior-year reported figure. Meanwhile, adverse impacts are likely to have been most pronounced during the second quarter as most containment measures and wide-scale ramp-downs in business operations were assumed to take place during this period.
What Does Our Model Say?
Our proven Zacks model predicts an earnings beat for TechnipFMC this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: TechnipFMC has an Earnings ESP of +9.40%.
Zacks Rank: TechnipFMC currently has a Zacks Rank #3, which increases the predictive power of ESP.
Highlights of Q1 Earnings & Surprise History
In the last reported quarter, this London-based company reported adjusted loss of 11 cents per share. Meanwhile, the Zacks Consensus Estimate was of earnings of 22 cents per share. Moreover, the year-earlier quarter's adjusted earnings per share came in at 6 cents. This underperformance can be primarily attributed to the coronavirus-induced vulnerable market scenario and lower-than-anticipated profits from the Technip Energies (previously Onshore/Offshore) segment, which is the major contributor to the company’s bottom line. Also, adjusted EBITDA of $167.1 million from the unit lagged the Zacks Consensus Estimate of $182 million.
Moreover, for the quarter ended Mar 31, the company’s revenues of $3.13 billion missed the Zacks Consensus Estimate by 8.8% but increased 7.5% from $2.9 billion a year ago owing to strong revenue contributions from its Subsea and Technip Energies unit.
As far as earnings surprises are concerned, this manufacturer and supplier of products, services and fully-integrated technology solutions for the energy industry is on a slippery slope. Earnings of the company underperformed the Zacks Consensus Estimate in three of the last four quarterly reports and beat the same in the remaining quarter, the average negative surprise being 76.78%. This is depicted in the graph below:
TechnipFMC plc Price and EPS Surprise
TechnipFMC plc price-eps-surprise | TechnipFMC plc Quote
Other Stocks to Consider
Here are some other firms worth considering from the energy space on the basis of our model, which shows that these too have the right combination of elements to beat on earnings this season:
National Oilwell Varco, Inc. (NOV - Free Report) has an Earnings ESP of +8.10% and is #3 Ranked at present. The company is scheduled to release earnings on Jul 27.
Helmerich Payne, Inc. (HP - Free Report) has an Earnings ESP of +2.03% and is presently Zacks #3 Ranked. The firm is scheduled to release earnings on Jul 29. You can see the complete list of today’s Zacks #1 Rank stocks here.
Oceaneering International, Inc. (OII - Free Report) has an Earnings ESP of +26.39% and a Zacks Rank of 3 at present. The company is scheduled to release earnings on Jul 29.
Zacks’ Single Best Pick to Double
From thousands of stocks, 5 Zacks experts each picked their favorite to gain +100% or more in months to come. From those 5, Zacks Director of Research, Sheraz Mian hand-picks one to have the most explosive upside of all.
With users in 180 countries and soaring revenues, it’s set to thrive on remote working long after the pandemic ends. No wonder it recently offered a stunning $600 million stock buy-back plan.
The sky’s the limit for this emerging tech giant. And the earlier you get in, the greater your potential gain.
Click Here, See It Free >>