TechnipFMC’s Q2 2018 Earnings Missed the Estimates

TechnipFMC (FTI) released its second-quarter financial results on July 25 after the market closed. The company recorded operating revenues of $2.96 billion in the second quarter—down 23% from ~$3.85 billion recorded in the second quarter of 2017. TechnipFMC’s second-quarter revenues decreased due to declining inbound orders in the Subsea segments. The negative impact was partially offset by increased demand for hydraulic fracturing, wellhead, and pressure control equipment and services.

Compared to the first quarter, TechnipFMC’s revenues decreased 5.3% in the second quarter. Schlumberger’s (SLB) revenues, TechnipFMC’s larger market cap peer, increased 6.1% sequentially. Halliburton’s (HAL) revenues increased 7.1% sequentially in the second quarter. To learn more, read Schlumberger Reports Q2 2018 Earnings, Beats Estimates.

For the second quarter, TechnipFMC’s adjusted EPS is $0.28. The EPS fell short of consensus sell-side analysts’ earnings estimate by 27%. A steeply weaker operating income margin in the Subsea segment due to weak inbound orders in the previous quarter and the negative impact of TechnipFMC’s projects nearing completion pushed the company’s earnings below analysts’ estimates.

Compared to the adjusted earnings in the second quarter of 2017, TechnipFMC’s second-quarter earnings fell 38%. Compared to the first quarter, TechnipFMC’s adjusted earnings remained nearly unchanged. On average, the adjusted earnings exceeded the consensus earnings by 1% in the past six quarters.

In the first half of 2018, TechnipFMC’s revenues decreased 15.9% compared to the first six months of 2017. Despite lower revenues, the company’s reported net income increased 37% in the first half of 2018 compared to the previous year. The net income improved due to 17% lower operating costs and expenses during the same period.

Wall Street analysts expect Nabors Industries (NBR) to cut its adjusted loss in the second quarter compared to the first quarter. They also expect Flotek Industries (FTK) to switch to an adjusted loss in the second quarter compared to an adjusted profit of $0.01 in the first quarter.