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TechnipFMC (FTI) to Report Q1 Earnings: What's in the Cards?

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Oilfield services company TechnipFMC plc (FTI - Free Report) is set to report first-quarter 2017 results after the closing bell on Apr 26.

A leading manufacturer and supplier of technology solutions for the energy industry, TechnipFMC offers subsea, surface, onshore and offshore solutions for oil and gas projects. Coming to its earnings surprise history, this London-based firm has a dismal record. The company had reported a negative earnings surprise of 1.18% in the trailing four quarters.

Let’s see how things are shaping up for this announcement.

Factors to Consider This Quarter

The fate of oilfield services firms are positively correlated with oil prices as these companies help exploration and production firms in setting up oil and gas wells efficiently. A historic OPEC production cut agreement along with the help of non-OPEC producers, resulted in crude prices to hover over $50 per barrel for the first two months of the quarter. However, in March oil again started to trade below $50 per barrel as the U.S. shale producers started gathering to the oil patches to take advantage of improved oil prices. Crude ended the previous quarter 5.8% lower which could negatively affect the earnings of the company. Further, due to the decreasing rig counts and activity levels in North America, the company does not have a positive outlook about its prospects for the current quarter.

However, following the Jan 2017 merger between FMC technologies and Technip SA, the combined entity is expected to gain sustainable competitive advantage on the back of complementary skills and capabilities of both the firms.  The combined entity is likely to result in substantial savings and offer unique integrated offshore project solutions.  The merger is expected to have positive impact on TechnipFMC earnings and create new growth opportunities.  This also gets reflected in the price performance of the company in the first quarter. The company’s shares declined 8% in the last three months, narrower than the Zacks categorized Oil and Gas Field Services industry’s fall of around 13%.

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 ESP and 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 0.00%. This is because the Most Accurate estimate and the Zacks Consensus Estimate are both pegged at 33 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 #2. Though a Zacks Rank #2 increases the predictive power of ESP, the company’s ESP of 0.00% makes surprise prediction difficult.

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

While earnings beat looks uncertain for TechnipFMC, here are some companies for investors to consider, that, according to our model have the right combination of elements to post an earnings beat this quarter:

Emerge Energy Services LP (EMES - Free Report) is expected to release first-quarter earnings results on May 3. The partnership has an Earnings ESP of +14.29% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Unit Corporation (UNT - Free Report) is expected to release first-quarter earnings results on May 4. The company has an Earnings ESP of +10.71% and a Zacks Rank #3.

Transocean Ltd. (RIG - Free Report) is expected to release first-quarter earnings results on May 3. The company has an Earnings ESP of +25% and a Zacks Rank #3.

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