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TechnipFMC’s Third-Quarter Earnings Rose on Cost Savings

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FTI’s Q3 earnings

TechnipFMC (FTI) reported its third-quarter earnings on October 24 after the markets closed. The company’s revenue for the quarter fell 24.1% YoY. However, it reported a 13.1% YoY rise in its net income. TechnipFMC reported EPS (earnings per share) of $0.30 for the quarter, up 15.4% YoY. The company’s adjusted EPS for the quarter were $0.31. TechnipFMC stock was up 4.6% in pre-market trading today.

“Our third quarter results illustrate the benefit of structural cost savings and strong project delivery,” noted Doug Pferdehirt, CEO of TechnipFMC. The company’s order backlog rose 9.2% YoY.

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Performance drivers

TechnipFMC’s Onshore/Offshore segment reported a 17.9% YoY rise in its operating income despite a 33.6% YoY decline in revenue. The rise in operating income was mainly due to a bonus on its Yamal LNG project in Russia, gain on an asset sale, a reduction in restructuring and severance charges, and strong project execution.

The company’s Surface Technologies segment reported a 5.9% YoY rise in operating income despite softness in completions activity in North America, which impacted Halliburton’s (HAL) Q3 results. TechnipFMC’s Subsea segment reported a YoY fall in revenues and operating income due to projects progressing towards completion in Africa, Europe, and the Asia-Pacific. The segment continues to be impacted by declines in inbound orders. The above graph shows the growth in FTI’s operating profit by segment.

2018 guidance update

TechnipFMC updated its guidance for 2018. It increased its revenue range for the Onshore/Offshore segment from $5.6 billion–$5.9 billion to $5.8 billion–$6.1 billion. It raised the segment’s EBITDA margin expectation to at least 13% from the earlier guidance of at least 12%.

However, TechnipFMC lowered its Surface Technologies segment’s EBITDA margin guidance from at least 17.5% to at least 16%. The company’s net interest expense guidance has fallen to ~$10 million–$12 million per quarter from the previous guidance of ~$20 million–$22 million per quarter.

Learn how Schlumberger (SLB) fared in Q3 in International Operations Drive Schlumberger’s Q3 Growth.

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