TechnipFMC plc (FTI) Q2 Earnings Lag Estimates, Sales Beat

TechnipFMC plc FTI reported second-quarter 2022 adjusted earnings of 2 cents per share, lagging the Zacks Consensus Estimate of 4 cents per share. This underperformance was due to higher product costs and lease expenses, which pushed up the company's total expenses.

Adjusted EBITDA from the Subsea unit for the reported quarter totaled $176 million, beating the Zacks Consensus Estimate of $163 million, while the Surface Technologies unit's profit came in at $32.4 million, outperforming the Zacks Consensus Estimate of $28.85 million.

For the quarter ended Jun 30, this seabed-to-surface oilfield equipment and services provider's revenues of $1.72 billion outperformed the Zacks Consensus Estimate by 1.30% and also increased from the year-ago quarter's $1.67 billion. This could be attributed to the better-than-anticipated revenue performance of the Surface Technologies unit.

Giving some respite to investors, FTI's second-quarter inbound orders increased 41.2% from the year-ago period's level to $2.2 billion, reflecting strong revenue visibility.

Also, the company's backlog rose. As of June-end, TechnipFMC's order backlog stood at $9.04 billion, improving about 23.6% from the 2021 reading.

Segment Analysis

Subsea:  Revenues in the quarter under review were $1.41 billion, up 1.46% from the year-ago sales figure of $1.39 billion, due to higher project activity in Africa, the North Sea and Brazil and seasonal improvement, including higher installation activity. Adjusted EBITDA was reported at $176 million, up by about 14.2% from the year-ago quarter's level due to higher revenues, improved margins in the backlog and increased installation and services activity. The quarterly inbound orders jumped 49.3% to $1.93 billion, while the backlog rose 14%.

Surface Technologies:  This smaller segment of the company recorded revenues of $302.6 million, up 10.2% year over year, primarily due to accelerated growth in drilling and completion activity in North America. Moreover, the unit's adjusted EBITDA increased by 7.3% to $32.4 million due to higher activity and improved pricing in North America. The segment's inbound orders rose marginally by about 2%, while the quarter-end backlog increased 208.9%.

Financials

In the reported quarter, TechnipFMC spent $36.1 million on capital programs. As of Jun 30, the company had cash and cash equivalents of $684.9 million and long-term debt of $1.37 billion, with a debt-to-capitalization of 29.2%.

2022 Outlook

TechnipFMC retained revenue expectations from the Subsea unit in the $5.2-$5.6 billion range for 2022 and maintained the Surface Technologies unit's 2022 revenue guidance between $1.15 and $1.30 billion.

This London-based oilfield services provider maintained its free cash flow projection for 2022, which is expected in the $100-$250 million band. The company guided an annual capital expenditure view of approximately $230 million and net interest expenses between $105 and $115 million, sticking to its earlier outlook.

Zacks Rank & Key Picks

TechnipFMC currently carries a Zacks Rank #2 (Buy). Some other top-ranked stocks from the energy space that warrant a look include California Resources CRC, Equinor EQNR and BP BP, each sporting a Zacks Rank #1 (Strong Buy).

The Zacks Consensus Estimate for California Resources' 2022 earnings has been revised about 18% upward over the past 60 days from $6.09 per share to $7.19.

The Zacks Consensus Estimate for CRC's 2022 earnings is pegged at $7.19 per share, up 17.9% from the year-ago earnings of $6.10.

Equinor beat the Zacks Consensus Estimate for earnings in all the trailing four quarters, the average being around 7.3%.

The Zacks Consensus Estimate for EQNR's 2022 earnings stands at $6.15 per share, up about 99.7% from the year-ago earnings of $3.08.

The Zacks Consensus Estimate for BP's 2022 earnings is pegged at $7.89 per share, which is an increase of about 106.5% from the year-ago earnings of $3.82.

BP beat the Zacks Consensus Estimate for earnings in all the trailing four quarters, the average being around 19.90%.
To read this article on Zacks.com click here.
 
Zacks Investment Research

Image sourced from Shutterstock