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Why Is FMC Technologies (FTI) Down 15.8% 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 15.8% 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 the most recent earnings report in order to get a better handle on the important catalysts.
TechnipFMC Posts Wider-Than-Expected Q2 Loss, Sales Top
Seabed-to-surface oilfield equipment and services provider TechnipFMC reported second-quarter 2021 adjusted loss per share of 6 cents, wider than the Zacks Consensus Estimate of a loss of 1 cent. However, the year-ago quarter reported a profit of 9 cents. This underperformance is due to lower-than-anticipated revenues from the Surface Technologies segment. Revenues from the unit totaled $274.5 million, falling short of the Zacks Consensus Estimate of $276 million.
For the quarter ended Jun 30, this seabed-to-surface oilfield equipment and services provider’s revenues of $1.67 billion beat the Zacks Consensus Estimate by 4.46%. The outperformance can be primarily attributed to higher-than-anticipated revenues from the Subsea segment, the major contributor to the company’s top and the bottom line. Revenues from the unit totaled $1.4 billion, ahead of the Zacks Consensus Estimate of $1.32 billion. However, the top line fell 47.2% from the year-ago quarter’s sales.
In the second quarter, TechnipFMC’s inbound orders rose 123.2% from the year-ago period’s level to $1.6 billion, reflecting improving revenue visibility.
But the company’s backlog was down. As of June-end, TechnipFMC’s order backlog stood at $7.3 billion, deteriorating 2.1% from the 2020 reading.
Segment Analysis
Subsea: Revenues in the quarter under review were $1.4 billion, up 1.1% from the year-ago sales figure of $1.38 billion with seasonal progress in installation and service activities. Adjusted EBITDA was reported at $154.1 million, reflecting a 54.7% year-over-year improvement on lower costs and a strong installation activity. Quarterly inbound orders jumped 152.4% to $1.3 billion though backlog fell 1.9%.
Surface Technologies: This smaller segment of the company recorded revenues of $274.5 million, up 13.6% year over year, primarily owing to an increase in North American activity, improved international services and a solid project execution. The unit’s adjusted EBITDA skyrocketed 263.9% to $30.2 million and surpassed the Zacks Consensus Estimate of $28.3 million on ramped-up sales volume and lower charges. The segment’s inbound orders rose 43.3% while the quarter-end backlog decreased 6.6%.
Financials
In the reported quarter, TechnipFMC spent $39.7 million on capital programs. Cash required from operations for the quarter came in at $85.9 million. As of Jun 30, the company had cash and cash equivalents of $854.9 million and a long-term debt of $2.2 billion with debt-to-capitalization of 37.8%.
2021 Outlook & Guidance
Looking ahead, TechnipFMC expects a robust global outlook, which will be more sustainable than the earlier cycles. The company raised its revenue expectation from the Subsea unit to the $5.2-$5.5 billion range from the previous guidance of $5-$5.4 billion. It still expects revenues from Surface Technologies unit to be $1.05-$1.25 billion. This London-based oilfield services provider maintains its free cash flow generation projection for 2021 in the $120-$220 million band. The company reiterated its annual capital expenditure view of $250 million.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month. The consensus estimate has shifted 217.68% due to these changes.
VGM Scores
At this time, FMC Technologies has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Charting a somewhat similar path, 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 B. If you aren't focused on one strategy, this score is the one you should be interested in.
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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Why Is FMC Technologies (FTI) Down 15.8% 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 15.8% 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 the most recent earnings report in order to get a better handle on the important catalysts.
TechnipFMC Posts Wider-Than-Expected Q2 Loss, Sales Top
Seabed-to-surface oilfield equipment and services provider TechnipFMC reported second-quarter 2021 adjusted loss per share of 6 cents, wider than the Zacks Consensus Estimate of a loss of 1 cent. However, the year-ago quarter reported a profit of 9 cents. This underperformance is due to lower-than-anticipated revenues from the Surface Technologies segment. Revenues from the unit totaled $274.5 million, falling short of the Zacks Consensus Estimate of $276 million.
For the quarter ended Jun 30, this seabed-to-surface oilfield equipment and services provider’s revenues of $1.67 billion beat the Zacks Consensus Estimate by 4.46%. The outperformance can be primarily attributed to higher-than-anticipated revenues from the Subsea segment, the major contributor to the company’s top and the bottom line. Revenues from the unit totaled $1.4 billion, ahead of the Zacks Consensus Estimate of $1.32 billion. However, the top line fell 47.2% from the year-ago quarter’s sales.
In the second quarter, TechnipFMC’s inbound orders rose 123.2% from the year-ago period’s level to $1.6 billion, reflecting improving revenue visibility.
But the company’s backlog was down. As of June-end, TechnipFMC’s order backlog stood at $7.3 billion, deteriorating 2.1% from the 2020 reading.
Segment Analysis
Subsea: Revenues in the quarter under review were $1.4 billion, up 1.1% from the year-ago sales figure of $1.38 billion with seasonal progress in installation and service activities. Adjusted EBITDA was reported at $154.1 million, reflecting a 54.7% year-over-year improvement on lower costs and a strong installation activity. Quarterly inbound orders jumped 152.4% to $1.3 billion though backlog fell 1.9%.
Surface Technologies: This smaller segment of the company recorded revenues of $274.5 million, up 13.6% year over year, primarily owing to an increase in North American activity, improved international services and a solid project execution. The unit’s adjusted EBITDA skyrocketed 263.9% to $30.2 million and surpassed the Zacks Consensus Estimate of $28.3 million on ramped-up sales volume and lower charges. The segment’s inbound orders rose 43.3% while the quarter-end backlog decreased 6.6%.
Financials
In the reported quarter, TechnipFMC spent $39.7 million on capital programs. Cash required from operations for the quarter came in at $85.9 million. As of Jun 30, the company had cash and cash equivalents of $854.9 million and a long-term debt of $2.2 billion with debt-to-capitalization of 37.8%.
2021 Outlook & Guidance
Looking ahead, TechnipFMC expects a robust global outlook, which will be more sustainable than the earlier cycles. The company raised its revenue expectation from the Subsea unit to the $5.2-$5.5 billion range from the previous guidance of $5-$5.4 billion. It still expects revenues from Surface Technologies unit to be $1.05-$1.25 billion. This London-based oilfield services provider maintains its free cash flow generation projection for 2021 in the $120-$220 million band. The company reiterated its annual capital expenditure view of $250 million.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month. The consensus estimate has shifted 217.68% due to these changes.
VGM Scores
At this time, FMC Technologies has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Charting a somewhat similar path, 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 B. If you aren't focused on one strategy, this score is the one you should be interested in.
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.