TechnipFMC (FTI) Q3 Earnings And Revenues Miss Estimates
Zacks Investment Research | Oct 23, 2019 11:28PM ET
TechnipFMC plc. (NYSE:FTI) suffered disappointing results in the third quarter of 2019, missing on both earnings and sales.
The oilfield services provider 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.
This underperformance was attributed to weaker-than-expected contribution from two of the company’s three segments. Precisely, adjusted EBITDA from the Subsea unit totalled $139 million, significantly falling short of the Zacks Consensus Estimate of $180 million. Moreover, adjusted
EBITDA from Surface Technologies came in at $44.4 million, missing the Zacks Consensus Estimate of $58 million.
However, providing some respite to investors amid this gloom, adjusted EBITDA from the Onshore/Offshore unit was $304 million, beating the Zacks Consensus Estimate of $274 million.
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.
Moreover, on a further discouraging note, the company booked record inbound orders of $2.6 billion, down 28.4% year over year. However, the firm’s backlog soared 59% year over year to $24.1 billion.
Segmental Analysis
Subsea: The segment’s revenues in the quarter under review were $1,342.2 million, up 11% from the year-ago figure of $1,209.1 million. With the subsea sector regaining momentum, the company benefited from the spurt in activities and the achievement of key milestones on projects nearing completion. However, owing to competitively priced backlog and relatively higher share of projects in early phases, TechnipFMC’s operating earnings dropped 43% from the prior-year period to $45.5 million in the quarter under review.
Even though the segment’s inbound orders in the reported quarter slightly dipped 2.8%, its backlog is boosted by $8.6 million, reflecting a 36.5% surge from the year-ago period.
Onshore/Offshore: This segment generated revenues of $1,596 million, increasing 4.2% from the prior-year quarter. Revenues were driven by ramped-up activities on the back of recent awards in downstream, petrochemical and offshore sectors, partly offset by completion of some key projects, especially Yamal LNG. Operating profit from the segment totalled $284.6 million, rising 16.9% from the third-quarter 2018 level, backed by a strong project execution and milestone bonuses on key projects.
The segment’s backlog jumped 79.4% year over year to $15.03 million in the quarter, primarily driven by the plum $7.6-billion contract win for the Arctic LNG 2 project.
Surface Technologies: The company’s smallest segment Surface Technologies recorded revenues of $396.6 million, down 1.4% year over year, primarily due to reduced sales in North America, mainly induced by a drop-in drilling and completion activities.
The segment experienced a downfall in its backlog by 5.9% from the year-ago level to $428.7 million. Owing to the short-cycle nature of the business, orders are generally converted into revenues within a year’s time.
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