It has been about a month since the last earnings report for FMC Technologies (
FTI Quick Quote FTI - Free Report) . Shares have added about 3.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is FMC Technologies due for a pullback? 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 Posts Narrower-Than-Expected Q1 Loss, Sales Top
Seabed-to-surface oilfield equipment and services provider TechnipFMC reported first-quarter 2021 adjusted loss per share of 3 cents, narrower than the Zacks Consensus Estimate of 10 cents and the year-ago loss of 13 cents.
The outperformance can be primarily attributed to higher-than-anticipated profits from the Subsea segment – the major contributor to the company’s top and bottom line. Precisely, adjusted EBITDA from the unit totaled $135.1 million, ahead of the Zacks Consensus Estimate of $115 million. Overall, TechnipFMC reported adjusted EBITDA of $165.2 million, surging 107.3% year over year, while adjusted EBITDA margin also more than doubled to 10.1%.
Moreover, for the quarter ended Mar 31, the company’s revenues of $1.6 billion beat the Zacks Consensus Estimate by 9.2% and increased 3.1% from a year ago.
In the first quarter, TechnipFMC’s inbound orders rose by 11.9% from the year-ago period to $1.7 billion – a signal of improving revenue visibility.
But the company’s backlog was down. As of March-end, TechnipFMC’s order backlog stood at $7.2 billion, deteriorating by 11.9% from 2020.
Segment Analysis The segment’s revenues in the quarter under review were $1.4 billion, up 10.6% from the year-ago sales figure of $1.3 billion with project and service activities on the rise. Meanwhile, adjusted EBITDA was reported at $135.1 million, reflecting a 28.9% year-over-year improvement on lower costs and strong installation activity. Quarterly inbound orders jumped 29.6% to $1.5 billion, though backlog fell 11.8%. Subsea: The company’s smaller segment – Surface Technologies – recorded revenues of $245.5 million, down 25.5% year over year, primarily due to slowdown in North American activity. Despite lower sales, the unit’s adjusted EBITDA increased 9.8% to $26.9 million and went past the Zacks Consensus Estimate of $23.4 million on operational efficiencies and volume and successful cost-cutting efforts. The segment’s inbound orders fell 44.5%, while quarter-end backlog decreased 13.7%. Surface Technologies: Financials
In the reported quarter, TechnipFMC spent $44.2 million on capital programs. Meanwhile, cash flow from operations for the quarter came in at $181.5 million. As of Mar 31, the company had cash and cash equivalents of $752.8 million and long-term debt of $2.4 billion with a debt-to-capitalization of 40%.
2021 Outlook & Guidance
Looking ahead, TechnipFMC expects a robust global recovery, which would be more sustainable than the earlier cycles. Based on this encouraging outlook, the company sees full-year subsea inbound orders in excess of $4 billion, with growth continuing into 2022.
TechnipFMC still expects revenues from the Subsea and Surface Technologies units to be $5-$5.4 billion and $1.05-$1.25 billion, respectively. Further, this London-based oilfield services provider expects to generate free cash flows in the $120-$220 million range in 2021, up from the previous guidance of $50-$150 million. Finally, the company reiterated its annual capital expenditure view of $250 million.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month. The consensus estimate has shifted 9.43% due to these changes.
At this time, FMC Technologies has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top 20% 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.
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, FMC Technologies has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.