TechnipFMC (FTI) Q2 Loss Wider Than Expected, Sales Beat

TechnipFMC plc


FTI

reported second-quarter 2021 adjusted loss per share of 6 cents, wider than the Zacks Consensus Estimate of a loss of 1 cent. However, the year-ago quarter reported a profit of 9 cents. This underperformance is due to lower-than-anticipated revenues from the Surface Technologies segment. Revenues from the unit totaled $274.5 million, falling short of the Zacks Consensus Estimate of $276 million.

For the quarter ended Jun 30, this seabed-to-surface oilfield equipment and services provider’s revenues of $1.67 billion beat the Zacks Consensus Estimate by 4.46%. The outperformance can be primarily attributed to higher-than-anticipated revenues from the Subsea segment, the major contributor to the company’s top and the bottom line. Revenues from the unit totaled $1.4 billion, ahead of the Zacks Consensus Estimate of $1.32 billion. However, the top line fell 47.2% from the year-ago quarter’s sales.

In the second quarter, TechnipFMC’s inbound orders rose 123.2% from the year-ago period’s level to $1.6 billion, reflecting improving revenue visibility.

But the company’s backlog was down. As of June-end, TechnipFMC’s order backlog stood at $7.3 billion, deteriorating 2.1% from the 2020 reading.

Segment Analysis

Subsea:


Revenues in the quarter under review were $1.4 billion, up 1.1% from the year-ago sales figure of $1.38 billion with seasonal progress in installation and service activities. Adjusted EBITDA was reported at $154.1 million, reflecting a 54.7% year-over-year improvement on lower costs and a strong installation activity. Quarterly inbound orders jumped 152.4% to $1.3 billion though backlog fell 1.9%.

Surface Technologies:


This smaller segment of the company recorded revenues of $274.5 million, up 13.6% year over year, primarily owing to an increase in North American activity, improved international services and a solid project execution. The unit’s adjusted EBITDA skyrocketed 263.9% to $30.2 million and surpassed the Zacks Consensus Estimate of $28.3 million on ramped-up sales volume and lower charges. The segment’s inbound orders rose 43.3% while the quarter-end backlog decreased 6.6%.

Financials

In the reported quarter, TechnipFMC spent $39.7 million on capital programs. Cash required from operations for the quarter came in at $85.9 million. As of Jun 30, the company had cash and cash equivalents of $854.9 million and a long-term debt of $2.2 billion with debt-to-capitalization of 37.8%.

2021 Outlook & Guidance

Looking ahead, TechnipFMC expects a robust global outlook, which will be more sustainable than the earlier cycles. The company raised its revenue expectation from the Subsea unit to the $5.2-$5.5 billion range from the previous guidance of $5-$5.4 billion. It still expects revenues from Surface Technologies unit to be $1.05-$1.25 billion. This London-based oilfield services provider maintains its free cash flow generation projection for 2021 in the $120-$220 million band. The company reiterated its annual capital expenditure view of $250 million.

Zacks Rank & Key Picks

TechnipFMC currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the same space include

Matador Resources Company


MTDR

,

Helix Energy Solutions Group, Inc.


HLX

and

Continental Resources, Inc.


CLR

, each presently flaunting a Zacks Rank #1 (Strong Buy). You can see


the complete list of today’s Zacks #1 Rank stocks here



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