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Why Is FMC Technologies (FTI) Up 14.9% 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 added about 14.9% 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 the most recent earnings report in order to get a better handle on the important drivers.
TechnipFMC Posts Wider Than Expected Q4 Loss
TechnipFMC reported a fourth-quarter 2021 adjusted loss per share of 12 cents, wider than the Zacks Consensus Estimate loss of 1 cent. The year-ago quarter reported a loss of 6 cents. This underperformance is due to lower-than-anticipated earningss from both the Subsea and Surface Technologies segments.
Adjusted EBITDA from the Subsea unit totaled $23.6 million, falling short of the Zacks Consensus Estimate of $34 million, while . the Surface Technologies unit’s profit totaled came in at $28.9 million, lagging the Zacks Consensus Estimate of $33.3 million.
For the quarter ended Dec 31, this seabed-to-surface oilfield equipment and services provider’s revenues of $1.52 billion missed the Zacks Consensus Estimate by 3.9% and also declined from the year-ago quarter’s $1.60 billion.
In the fourth quarter, TechnipFMC’s inbound orders more than doubled from the year-ago period’s level to $2.1 billion, reflecting strong revenue visibility.
Also, the company’s backlog was up. As of December-end, TechnipFMC’s order backlog stood at $7.66 billion, improving about 5% from the 2020 reading.
Segment Analysis
Subsea: Revenues in the quarter under review were $1.24 billion, down 7.6% from the year-ago sales figure of $1.34 billion due to reduced activities in the North Sea and Asia. However, adjusted EBITDA was reported at $123.6 million, reflecting an improvement of 6.1% from the year-ago quarter’s level on the back of lower depreciation and amortization. Quarterly inbound orders jumped 45.3% to $1.03 billion while backlog fell 5%.
Surface Technologies: This smaller segment of the company recorded revenues of $287.1 million, up 9.5% year over year, primarily owing to an increase in North American drilling and completion activity and y increased revenue in North America. But the unit’s adjusted EBITDA decreased 6.5% to $28.9 million due to costs associated with new international manufacturing capacity. The segment’s inbound orders rose 256.9% while the quarter-end backlog increased 172%.
Financials
In the reported quarter, TechnipFMC spent $60.5 million on capital programs. Cash provided by operations for the quarter came in at $483.5 million. As of Dec 31, the company had cash and cash equivalents of $1.33 billion and a long-term debt of $1.73 billion with debt-to-capitalization of 33.7%.
2022 Outlook
Looking ahead, TechnipFMC announced revenue expectation from the Subsea unit in the $5.2-$5.6 billion range for 2022. In 2022, It expects revenues from the Surface Technologies unit in the $1.15 -$1.30 billion band and an EBITDA margin in the range of 11% to 12%.
This London-based oilfield services provider said that its free cash flow generation projection for 2022 is expected to be in the $100-$250 million band. The company guided toward an annual capital expenditure view of $230 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 -104.69% due to these changes.
VGM Scores
Currently, FMC Technologies has a nice Growth Score of B, a grade with the same score on the momentum front. 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 A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been 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.
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Why Is FMC Technologies (FTI) Up 14.9% Since Last Earnings Report?
It has been about a month since the last earnings report for FMC Technologies (FTI - Free Report) . Shares have added about 14.9% 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 the most recent earnings report in order to get a better handle on the important drivers.
TechnipFMC Posts Wider Than Expected Q4 Loss
TechnipFMC reported a fourth-quarter 2021 adjusted loss per share of 12 cents, wider than the Zacks Consensus Estimate loss of 1 cent. The year-ago quarter reported a loss of 6 cents. This underperformance is due to lower-than-anticipated earningss from both the Subsea and Surface Technologies segments.
Adjusted EBITDA from the Subsea unit totaled $23.6 million, falling short of the Zacks Consensus Estimate of $34 million, while . the Surface Technologies unit’s profit totaled came in at $28.9 million, lagging the Zacks Consensus Estimate of $33.3 million.
For the quarter ended Dec 31, this seabed-to-surface oilfield equipment and services provider’s revenues of $1.52 billion missed the Zacks Consensus Estimate by 3.9% and also declined from the year-ago quarter’s $1.60 billion.
In the fourth quarter, TechnipFMC’s inbound orders more than doubled from the year-ago period’s level to $2.1 billion, reflecting strong revenue visibility.
Also, the company’s backlog was up. As of December-end, TechnipFMC’s order backlog stood at $7.66 billion, improving about 5% from the 2020 reading.
Segment Analysis
Subsea: Revenues in the quarter under review were $1.24 billion, down 7.6% from the year-ago sales figure of $1.34 billion due to reduced activities in the North Sea and Asia. However, adjusted EBITDA was reported at $123.6 million, reflecting an improvement of 6.1% from the year-ago quarter’s level on the back of lower depreciation and amortization. Quarterly inbound orders jumped 45.3% to $1.03 billion while backlog fell 5%.
Surface Technologies: This smaller segment of the company recorded revenues of $287.1 million, up 9.5% year over year, primarily owing to an increase in North American drilling and completion activity and y increased revenue in North America. But the unit’s adjusted EBITDA decreased 6.5% to $28.9 million due to costs associated with new international manufacturing capacity. The segment’s inbound orders rose 256.9% while the quarter-end backlog increased 172%.
Financials
In the reported quarter, TechnipFMC spent $60.5 million on capital programs. Cash provided by operations for the quarter came in at $483.5 million. As of Dec 31, the company had cash and cash equivalents of $1.33 billion and a long-term debt of $1.73 billion with debt-to-capitalization of 33.7%.
2022 Outlook
Looking ahead, TechnipFMC announced revenue expectation from the Subsea unit in the $5.2-$5.6 billion range for 2022. In 2022, It expects revenues from the Surface Technologies unit in the $1.15 -$1.30 billion band and an EBITDA margin in the range of 11% to 12%.
This London-based oilfield services provider said that its free cash flow generation projection for 2022 is expected to be in the $100-$250 million band. The company guided toward an annual capital expenditure view of $230 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 -104.69% due to these changes.
VGM Scores
Currently, FMC Technologies has a nice Growth Score of B, a grade with the same score on the momentum front. 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 A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been 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.