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TechnipFMC (FTI) to Report Q4 Earnings: What's in Store?

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TechnipFMC plc FTI is set to release fourth-quarter 2019 results after the closing bell on Wednesday, Feb 26. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of 42 cents per share on revenues of $3.9 billion.

Let’s delve into the factors that might have influenced the company’s performance in the December quarter. But it’s worth taking a look at TechnipFMC’s previous quarter performance first.

Highlights of Q3 Earnings & Surprise History

In the last reported quarter, the London-based company missed the consensus mark on weaker-than-expected contribution from two of the company’s three segments – Subsea and Surface Technologies. TechnipFMC reported adjusted earnings of 12 cents a share, lagging the Zacks Consensus Estimate of 49 cents by a wide margin. The bottom line was also lower than the year-ago earnings of 31 cents a share. Meanwhile, third-quarter revenues came in at $3,335.1 million, lower than the Zacks Consensus Estimate of $3,561 million but 6% higher than the prior-year figure of $3,143.8 million on improved contribution from the Onshore/Offshore unit.

As far as earnings surprises are concerned, the manufacturer and supplier of products, services and fully integrated technology solutions for the energy industry is on a slippery slope, having underperformed the Zacks Consensus Estimate in three of the last four reports, with the average negative surprise being 67.1%. This is depicted in the graph below:

TechnipFMC plc Price and EPS Surprise


TechnipFMC plc Price and EPS Surprise

TechnipFMC plc price-eps-surprise | TechnipFMC plc Quote

Factors to Consider This Quarter

TechnipFMC’s ‘Subsea’ and ‘Onshore/Offshore’ segments — which collectively represents more than 8% of the company’s revenues — are likely to have performed well in fourth-quarter 2019.

Thanks to higher installation, well intervention and asset refurbishment works, TechnipFMC is likely to have experienced continued strength fourth-quarter Subsea revenues. As a result, the company’s sales from the segment is pegged at $1.6 billion, compared with $1.2 billion in the corresponding period of 2018.

Meanwhile, the Onshore/Offshore unit is expected to reflect the impact of strong execution across portfolio. As a proof of this, segment revenue for the fourth quarter is pegged at $1.9 billion, higher than the $1.7 billion reported in the year-ago period.

However, on a somewhat bearish note, weakness in North American activity is expected to get reflected in the Surface segment’s top-line number, which may have decreased 5% year over year to $396 million.

What Does Our Model Say?

The proven Zacks model does not conclusively show that TechnipFMC is likely to beat estimates in the fourth quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates. But that’s not the case here.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, for this company stands at -7.31%.

Zacks Rank: TechnipFMC has a Zacks Rank of 3.

Stocks to Consider

While earnings beat looks uncertain for TechnipFMC, here are some firms from the energy space you may want to consider on the basis of our model, which shows that they have the right combination of elements to post earnings beat this season:

Berry Petroleum Corporation BRY has an Earnings ESP of +2.50% and a Zacks Rank #1. The company is scheduled to release earnings on Feb 26.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Apache Corporation APA has an Earnings ESP of +26.53% and a Zacks Rank #3. The company is scheduled to release earnings on Feb 26.

QEP Resources, Inc. QEP has an Earnings ESP of +15.79% and is Zacks #3 Ranked. The company is scheduled to release earnings on Feb 26.

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