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Analyzing FTI and Technip’s Revenue and Net Income in 3Q16

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Dec. 6 2016, Published 8:02 a.m. ET

FMC Technologies’ revenue and net income

From 3Q15 to 3Q16, FMC Technologies’ (FTI) revenue fell 29%, while its net income fell 61%. It recorded ~$1.1 billion in revenue and ~$32 million in net income in 3Q16. In comparison, Halliburton’s (HAL) reported net income was ~$6 million in 3Q16. FMC Technologies accounts for 3.7% of the SPDR S&P Oil & Gas Equipment & Services ETF (XES).

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Technip’s revenue and net income in 3Q16

From 3Q15 to 3Q16, although Technip’s revenue fell marginally (6% down), its net income rose 12%. In 3Q16, Technip’s revenue and net income were 2.9 billion euros and 184 million euros, respectively.

What impacted FMC Technologies’ margin?

  • The company’s margin is impacted by lower subsea revenue due to lower inbound orders. It’s primarily due to decreased activity in FMC Technologies’ Schilling Robotics and Multi Phase Meters businesses.
  • FMC Technologies had $24 million in restructuring and impairment charges in 3Q16 due to a prolonged downturn in the energy market. It impacted FMC Technologies’ business outlook.
  • It was impacted by merger transaction and integration costs related to the pending merger with Technip.
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Why did Technip’s margin improve?

  • strong vessel utilization in the Subsea segment
  • cost reduction – by 3Q16, Technip achieved ~90% of its cost savings objective of 1 billion euros in 2016

Will the merger benefit from Technip’s improved guidance?

Technip upgraded its 2016 guidance for the Subsea segment, with adjusted revenues expected above 5 billion euros and adjusted operating income from recurring activities of ~700 million euros. Technip’s guidance on its Onshore/Offshore segment remains unchanged.

Next, we’ll compare FMC Technologies and Technip’s free cash flows.

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