TechnipFMC (NYSE: NYSE:FTI) has received reaffirmation of a Buy rating and a $33.00 price target from BTIG, following the company's third-quarter 2024 earnings release.
TechnipFMC's adjusted EBITDA for the quarter was approximately $386 million, exceeding the consensus estimate of around $373 million by about 4%. This beat was attributed to lower-than-expected operating costs.
Subsea revenues were reported at roughly $2.0 billion, consistent with consensus estimates and marking a 1% sequential increase.
This growth was attributed to heightened activity in the Asia-Pacific region, Latin America, and Canada, which balanced out the completion of projects in the Gulf of Mexico and the North Sea.
Subsea EBITDA margins improved to around 16%, a sequential increase of approximately 90 basis points and a significant year-over-year increase of around 490 basis points.
The company's Subsea book-to-bill ratio was approximately 1.2x during the third quarter, a slight decrease from 1.4x in the second quarter. Nonetheless, the Subsea backlog grew by about 14% year-over-year to approximately $13.7 billion, which represents around 93% of the total backlog.
Looking forward, TechnipFMC's management has raised its Subsea guidance for 2025, signaling confidence in the future with upcoming opportunities over the next year, particularly for the company's Subsea 2.0 and integrated offerings.
These offerings are expected to benefit from an average annual subsea spending growth of about 8% over the next three years, outperforming the overall offshore oilfield services spending growth, which is projected at around 2%.
The company's management also highlighted key project sanctions expected in 2026 and a record front-end engineering design (FEED) pipeline, which could sustain high levels of subsea activity through the end of the decade. The bottom line, as per BTIG, is that TechnipFMC's integrated offering continues to set the company apart as it expands its backlog amid increasing global subsea spending.
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