TechnipFMC Earnings: Year-To-Date Order Intake Already Exceeds $8 Billion of Orders Secured in Fiscal 2022

TechnipFMC FTI continued to deliver solid performance in the third quarter and remains on track to achieve its 2023 targets outlined at the beginning of the year. Revenue increased 4% quarter over quarter and 19% year over year. The firmwide adjusted EBITDA margin expanded by 110 basis points sequentially, reaching 11.5% for the quarter. Elevated offshore oil and gas activity shows no signs of slowing down anytime soon, indicated by a robust global project pipeline extending through at least 2025. Management indicated the firm is on track to deliver full-year results at the high end of guidance, which falls in line with our expectations. We maintain our no-moat rating and $18 fair value estimate following the results.

Order intake totals $8.5 billion year to date, already well above the $8 billion of orders secured in all of fiscal 2022. The firm exited the quarter with $13.2 billion in its backlog, over 90% of which involves subsea contracts, and about half of which involves projects commencing in 2025. TechnipFMC is on track to realize more than $25 billion of inbound orders between 2023 and 2025, replenishing its backlog with increasingly higher-margin revenue streams (mainly driven by iEPCI orders) ensuring solid operating performance through at least 2027.

Improving financial performance will enable TechnipFMC to allocate more capital to shareholders moving forward. Shareholder returns totaled $172 million year to date. This includes the firm’s first quarterly dividend since suspending the program in 2020. At $0.05 per share, the third-quarter dividend was modest compared with historical distributions of $0.13. Management expressed intentions to increase shareholder returns by 35% in 2024, and we expect further expansions as the firm’s financial position improves over the next several years. By our estimate, top-line growth will average 9% per year through 2027 with firmwide adjusted EBITDA margins averaging in the midteens over the same period.