What Drove TechnipFMC’s Second-Quarter Earnings?

TechnipFMC (FTI) released its Q2 2018 financial results on July 25. In the second quarter, TechnipFMC recorded total revenues of ~$2.96 billion, down 23% from ~$3.85 billion in Q2 2017. In Q2 2018, FTI’s reported net income was $105.7 million, a 36% deterioration over Q2 2017 when FTI reported $164.9 million in net income.

In comparison, Schlumberger’s (SLB) year-over-year revenues increased 11.3% in Q2 2018, while Baker Hughes’s (BHGE) year-over-year revenues increased 2.5% on a combined business basis. Halliburton’s (HAL) second-quarter revenues increased 24% compared to a year ago.

• The downturn in the offshore and subsea energy market continued to affect FTI negatively in Q2 2018.
• Prior-period declines in inbound orders related to the market downturn affected Q2 2018 revenues negatively.
• Various international projects nearing completion affected FTI’s financial results negatively.

• higher project activity in Asia-Pacific and Europe, Middle East, India, and Africa
• increase in demand for hydraulic fracturing services, wellhead systems, and pressure control equipment, and services
• inbound orders in the Onshore/Offshore segment more than doubled in the second quarter compared to a year ago
• improved cost structure due to cost reduction activities
• higher vessel utilization in the Subsea segment
• benefits of merger synergy following merger of Technip and FMC Technologies.

For more detail, read Market Realist’s Technip-FMC Technologies Merger: Reaching the Finale.