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TechnipFMC (FTI) Q4 Earnings: Disappointment in the Cards?
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Oil drilling equipment maker, TechnipFMC Plc (FTI - Free Report) is expected to release fourth-quarter 2016 results on Tuesday, Feb 21.
In the preceding three-month period, the Houston, TX-based firm delivered a positive earnings surprise of 52.17%. The company’s earnings surprise history is disappointing. TechnipFMC missed estimates in three of the last four quarters.
Let’s see how things are shaping up for this announcement.
Factors to Consider This Quarter
Despite the massive recovery in crude prices since February, the commodity is still trading just over $50 – about half the level of two years ago – and far below the breakeven price for many oil and gas firms. As a result, the top energy companies continue to cut spending (particularly on the costly upstream projects) due to lower profit margins. This in turn means less work for equipment suppliers like TechnipFMC.
Following the substantial decline in rig count, activity levels in North America deteriorated more than expected. The company has already warned that the year 2017 could also turn out to be difficult as order growth is likely to remain weak.
Moreover, the company has historically used bolt-on acquisitions to plug holes in its product/service portfolio. The company may find it difficult to complete accretive transactions in the future, which in turn, could negatively impact its growth rate.
Earnings Whispers
Our proven model does not conclusively show that TechnipFMC will beat estimates this quarter. That is because a stock needs to have both a positive Earnings ESPand a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is -7.69%. This is because the Most Accurate estimate stands at 24 cents and the Zacks Consensus Estimate is pegged at 26 cents. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Zacks Rank: TechnipFMC has a Zacks Rank #4 (Sell).
Please note that we caution against Sell-rated stocks (Zacks Rank #4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Although an earnings beat looks uncertain for TechnipFMC, here are some firms that you may want to consider on the basis of our model, which shows that they have the right combination of elements to post an earnings beat this quarter.
Sprague Resources LP has an Earnings ESP of +3.64% and a Zacks Rank #2. The partnership is anticipated to release fourth-quarter earnings on Mar 9.
Carrizo Oil & Gas, Inc. has an Earnings ESP of +6.25% and a Zacks Rank #2. The company is likely to release fourth-quarter earnings on Feb 23.
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TechnipFMC (FTI) Q4 Earnings: Disappointment in the Cards?
Oil drilling equipment maker, TechnipFMC Plc (FTI - Free Report) is expected to release fourth-quarter 2016 results on Tuesday, Feb 21.
In the preceding three-month period, the Houston, TX-based firm delivered a positive earnings surprise of 52.17%. The company’s earnings surprise history is disappointing. TechnipFMC missed estimates in three of the last four quarters.
Let’s see how things are shaping up for this announcement.
Factors to Consider This Quarter
Despite the massive recovery in crude prices since February, the commodity is still trading just over $50 – about half the level of two years ago – and far below the breakeven price for many oil and gas firms. As a result, the top energy companies continue to cut spending (particularly on the costly upstream projects) due to lower profit margins. This in turn means less work for equipment suppliers like TechnipFMC.
FMC Technologies, Inc. Price and EPS Surprise
FMC Technologies, Inc. Price and EPS Surprise | FMC Technologies, Inc. Quote
Following the substantial decline in rig count, activity levels in North America deteriorated more than expected. The company has already warned that the year 2017 could also turn out to be difficult as order growth is likely to remain weak.
Moreover, the company has historically used bolt-on acquisitions to plug holes in its product/service portfolio. The company may find it difficult to complete accretive transactions in the future, which in turn, could negatively impact its growth rate.
Earnings Whispers
Our proven model does not conclusively show that TechnipFMC will beat estimates this quarter. That is because a stock needs to have both a positive Earnings ESPand a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is -7.69%. This is because the Most Accurate estimate stands at 24 cents and the Zacks Consensus Estimate is pegged at 26 cents. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Zacks Rank: TechnipFMC has a Zacks Rank #4 (Sell).
Please note that we caution against Sell-rated stocks (Zacks Rank #4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Although an earnings beat looks uncertain for TechnipFMC, here are some firms that you may want to consider on the basis of our model, which shows that they have the right combination of elements to post an earnings beat this quarter.
W&T Offshore, Inc. (WTI - Free Report) is expected to release fourth-quarter earnings results on Mar 14. The company has an Earnings ESP of +73.91% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Sprague Resources LP has an Earnings ESP of +3.64% and a Zacks Rank #2. The partnership is anticipated to release fourth-quarter earnings on Mar 9.
Carrizo Oil & Gas, Inc. has an Earnings ESP of +6.25% and a Zacks Rank #2. The company is likely to release fourth-quarter earnings on Feb 23.
Just Released – Driverless Cars: Your Roadmap to Mega-Profits Today
In this latest Special Report, Zacks’ Aggressive Growth Strategist Brian Bolan explores a full-blown technological breakthrough in the making – autonomous cars. He also spotlights 8 stocks with tremendous gain potential to feed off this phenomenon. Click to see the stocks right now >>