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TechnipFMC (FTI) to Report Q2 Earnings: What's in the Cards?
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TechnipFMC plc (FTI - Free Report) is set to release second-quarter 2018 results after the closing bell on Jul 25.
London-based TechnipFMC is a leading manufacturer and supplier of technology solutions for the energy industry. In the last reported quarter, the company missed the Zacks Consensus Estimate, primarily due to weak contribution from the Subsea segment.
Coming to earnings surprise history, the company has a bad record. It missed estimates in three of the last four quarters resulting in an average negative surprise of 16%.
Let’s see how things are shaping up for this announcement.
Which Way are Estimates Trending?
Let’s take a look at the estimate revisions to get a clear picture of what analysts are thinking about the company before earnings release.
In the to-be-reported quarter, the company is expected to report earnings of 39 cents per share, which has seen six upward revisions and no downward revision in the past 30 days. However, the profit is expected to be lower than the year-ago quarter’s figure of 45 cents.
Further, analysts polled by Zacks expect revenues of $3.21 billion in the quarter to be reported, reflecting a decline of 16.2% from the year-ago quarter.
Factors at Play
The Zacks Consensus Estimate for the Subsea segment’s operating profit for the to-be-reported quarter stands at $104 million compared with $236.1 million recorded in the second quarter of 2017. Award postponements and lower margins might result in the decrease in profit. Adjusted EBITDA for the Onshore/Offshore segment is expected at $170 million, lower than the prior-year reported figure of $187.7 million.
However, rising momentum in the North American market is likely to boost revenues for the Surface Technologies segment to $388 million from $300 million recorded in the year-ago quarter. Further, on a more encouraging note, the Surface Technologies segment is expected to achieve an operating profit of $53 million compared with $22.5 million in the year-ago quarter, on the back of favorable product mix and leaner cost structure.
The table below shows the Zacks Consensus Estimate for certain metrics for the operating segments of the company compared with their year-ago data.
What Does the Zacks Model Unveil?
Our proven model does not show that TechnipFMC is likely to beat the Zacks Consensus Estimate in the second quarter. This 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. Unfortunately, this is not the case here as elaborated below.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is pegged at -0.11%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: TechnipFMC carries a Zacks Rank #3. Though a Zacks Rank of 3 increases the predictive power of ESP, a negative ESP makes surprise prediction difficult.
We caution against Sell-rated stocks (Zacks Ranks #4 and 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Energy Stocks With Favorable Combination
Here are some companies from the energy space which, according to our model, have the right combination of elements to post an earnings beat in the to-be-reported quarter.
The Woodlands, TX-based Anadarko Petroleum Corporation has a Zacks Rank #2 and an Earnings ESP of +15.52%. The company will report second-quarter earnings on Jul 31.
Frisco, TX-based Comstock Resources, Inc. (CRK - Free Report) carries a Zacks Rank #2 and has an Earnings ESP of +22.45%. The company is anticipated to report quarterly results on Aug 6.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
Image: Bigstock
TechnipFMC (FTI) to Report Q2 Earnings: What's in the Cards?
TechnipFMC plc (FTI - Free Report) is set to release second-quarter 2018 results after the closing bell on Jul 25.
London-based TechnipFMC is a leading manufacturer and supplier of technology solutions for the energy industry. In the last reported quarter, the company missed the Zacks Consensus Estimate, primarily due to weak contribution from the Subsea segment.
Coming to earnings surprise history, the company has a bad record. It missed estimates in three of the last four quarters resulting in an average negative surprise of 16%.
TechnipFMC plc Price and EPS Surprise
TechnipFMC plc Price and EPS Surprise | TechnipFMC plc Quote
Let’s see how things are shaping up for this announcement.
Which Way are Estimates Trending?
Let’s take a look at the estimate revisions to get a clear picture of what analysts are thinking about the company before earnings release.
In the to-be-reported quarter, the company is expected to report earnings of 39 cents per share, which has seen six upward revisions and no downward revision in the past 30 days. However, the profit is expected to be lower than the year-ago quarter’s figure of 45 cents.
Further, analysts polled by Zacks expect revenues of $3.21 billion in the quarter to be reported, reflecting a decline of 16.2% from the year-ago quarter.
Factors at Play
The Zacks Consensus Estimate for the Subsea segment’s operating profit for the to-be-reported quarter stands at $104 million compared with $236.1 million recorded in the second quarter of 2017. Award postponements and lower margins might result in the decrease in profit. Adjusted EBITDA for the Onshore/Offshore segment is expected at $170 million, lower than the prior-year reported figure of $187.7 million.
However, rising momentum in the North American market is likely to boost revenues for the Surface Technologies segment to $388 million from $300 million recorded in the year-ago quarter. Further, on a more encouraging note, the Surface Technologies segment is expected to achieve an operating profit of $53 million compared with $22.5 million in the year-ago quarter, on the back of favorable product mix and leaner cost structure.
The table below shows the Zacks Consensus Estimate for certain metrics for the operating segments of the company compared with their year-ago data.
What Does the Zacks Model Unveil?
Our proven model does not show that TechnipFMC is likely to beat the Zacks Consensus Estimate in the second quarter. This 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. Unfortunately, this is not the case here as elaborated below.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is pegged at -0.11%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: TechnipFMC carries a Zacks Rank #3. Though a Zacks Rank of 3 increases the predictive power of ESP, a negative ESP makes surprise prediction difficult.
We caution against Sell-rated stocks (Zacks Ranks #4 and 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Energy Stocks With Favorable Combination
Here are some companies from the energy space which, according to our model, have the right combination of elements to post an earnings beat in the to-be-reported quarter.
Houston, TX-based ConocoPhillips (COP - Free Report) has a Zacks Rank #1 and an Earnings ESP of +10.78%. The company is scheduled to report second-quarter earnings on Jul 26. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Woodlands, TX-based Anadarko Petroleum Corporation has a Zacks Rank #2 and an Earnings ESP of +15.52%. The company will report second-quarter earnings on Jul 31.
Frisco, TX-based Comstock Resources, Inc. (CRK - Free Report) carries a Zacks Rank #2 and has an Earnings ESP of +22.45%. The company is anticipated to report quarterly results on Aug 6.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
See This Ticker Free >>