TechnipFMC (FTI) released its 1Q18 financial results on May 9. From 1Q17 to 1Q18, the Subsea segment’s revenue decreased 14%, while the Onshore/Offshore segment decreased 10.8% fall. The Surface Technologies segment’s revenue rose 49% during the same period.
The Onshore/Offshore and the Surface Technologies segments saw remarkable operating income growth. The Onshore/Offshore segment’s operating income increased 42% in 1Q18 compared to 1Q17. The Surface Technologies segment’s operating income was $30.6 million compared to an operating loss of $18.6 million last year. TechnipFMC accounts for 5.6% of the iShares US Oil Equipment & Services ETF (IEZ). IEZ tracks an index composed of US equities in the oil equipment and services sector. IEZ increased 1% in the past year, while FTI increased 4.7% during this period.
Positive earnings drivers in 1Q18
- higher project activity in Europe, the Middle East, India, Africa, and the Asia-Pacific regions
- benefits of merger synergy following the merger of Technip S.A. and FMC Technologies—read Technip-FMC Technologies Merger: Reaching the Finale
- increased demand for hydraulic fracturing, wellhead, and flow metering equipment
- improved pricing for TechnipFMC’s offerings in North America
Negative earnings drivers in 1Q18
- prior-period declines in inbound orders related to the market downturn affected 1Q18 revenues negatively
- lower vessel utilization in the Subsea segment
- lower-priced backlog and project award deferrals in international markets
- higher costs associated with the reactivation of hydraulic fracturing assets
Next, we’ll discuss TechnipFMC’s returns.