Analyst Note| Preston Caldwell |
TechnipFMC reported first quarter revenue up 2% sequentially, adjusted for the February 2021 spinoff of Technip Energies. The revenue was driven by a 4% increase in the subsea segment, owing to improvement in subsea activity and strong operational performance. This was offset by a 6% sequential revenue decline in the surface segment, owing to seasonal spending declines in international markets along with TechnipFMC's decision to exit from certain weak-performing North America product lines. Adjusted operating margins improved by about 100 basis points (excluding corporate costs, for which we don't yet have a pro forma estimate for the prior quarter). Our fair value estimate and no-moat rating are unchanged following the results.