Bernstein: TechnipFMC’s third-quarter cash flow beats expectations; subsea guidance raised for the full year

Which third-quarter results beat expectations?

TechnipFMC’s third-quarter revenue was 2.896 billion dollars, up 9.4% year over year and 4.8% quarter over quarter, and 3.8% above the market consensus compiled by Bloomberg. Adjusted EBITDA was 628 million dollars, up 21% year over year and also 3.8% above consensus.
Adjusted earnings per share were 1.05 dollars, above the consensus of 0.88 dollars; free cash flow was 470 million dollars, about 29% above the consensus of 365 million dollars.

Third-quarter subsea revenue was 2.6 billion dollars, above the consensus of 2.485 billion dollars; adjusted EBITDA was 612 million dollars, above the consensus of 577 million dollars. The margin reached 23.5%, up 1.7 percentage points year over year and above the consensus of 23.2%.
The company raised its 2026 subsea revenue guidance from 9.2 billion–9.6 billion dollars to 9.6 billion–9.8 billion dollars, while maintaining its margin guidance at 21%–22%. Its initial 2027 guidance calls for revenue of 10 billion–10.4 billion dollars and a margin of 22.5%–24%.
The group raised its 2026 free cash flow guidance from 1.3 billion–1.45 billion dollars to 1.45 billion–1.55 billion dollars, and lowered its effective tax rate guidance from 27%–31% to 25%–27%.

The company received 2.3 billion dollars in new orders in the third quarter, below the consensus of 2.9 billion dollars; subsea backlog was 15.487 billion dollars, also below the consensus of 15.977 billion dollars.
Of the subsea backlog, 1.922 billion dollars is scheduled for execution in the fourth quarter of 2026, 6.057 billion dollars in 2027, and 7.508 billion dollars in 2028 and beyond, providing a basis for subsequent revenue.
The company expects to secure at least 14.5 billion dollars in subsea orders over the next five quarters. Bernstein believes the 32 billion-dollar subsea project opportunity pipeline supports the company’s view that offshore activity will continue into the 30s.

Although Bernstein believes the company conveyed a positive operating outlook, it maintained its Market-Perform rating and 45-dollar price target; the report listed a closing price of 71.40 dollars on 28 October.
The bank’s price target uses a discounted cash flow model, assuming a weighted average cost of capital of 7.9%, normalized free cash flow of 852 million dollars, and a long-term growth rate of 3.5%.