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Could Guidance Change Affect TechnipFMC in 2017?

PART:
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Part 3
Could Guidance Change Affect TechnipFMC in 2017? PART 3 OF 6

What Drove TechnipFMC’s Revenues and Margins in 3Q17?

TechnipFMC’s revenues by segment

From 2Q17 to 3Q17, TechnipFMC’s (FTI) Subsea segment’s revenue fell ~15%. The Surface Technologies segment rose ~18%, while the Onshore/Offshore segment rose 27% during the same period. Read more about FTI in Market Realist’s TechnipFMC: What Worked and What Did Not in 3Q17.

From 2Q17 to 3Q17, the Subsea segment’s operating income fell 56.5%. During that period, the Onshore/Offshore segment’s operating income rose a moderate ~1%. The Surface Technologies segment switched to $49 million operating profit in 3Q17 from an operating loss of $1 million in 2Q17.

What Drove TechnipFMC’s Revenues and Margins in 3Q17?

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Positive drivers

  • benefits from FTI’s cost reduction initiatives
  • strong project executions
  • robust increase in North American well completion activity
  • stable sales in international markets
  • benefits of product mix related to fluid control sales

Negative driver

  • lower upstream activity adversely affecting FTI’s Subsea segment

3Q17 revenue comparison with peers

Schlumberger’s (SLB) revenues rose 6% in 3Q17 over 2Q17, while Superior Energy Services’ (SPN) revenues rose ~8% during the same period. From 2Q17 to 3Q17, Nabors Industries’ (NBR) revenues rose ~5%.

FTI makes up 0.07% of the SPDR S&P 500 ETF (SPY). SPY tracks the price and yield performance of the S&P 500 Index (SPX-INDEX), which has risen 14% since January 17, 2017, compared to an 18% fall in FTI stock during the same period.

Next, let’s see how dependent TechnipFMC is on upstream companies’ capex (capital expenditure).

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