NEWCASTLE & HOUSTON - TechnipFMC (NYSE:FTI), a global provider of technology solutions to the energy industry, has been awarded a significant contract to supply subsea production systems for the Whiptail project, located in the Stabroek Block off the coast of Guyana. The contract, which falls within the $500 million to $1 billion range, was granted by ExxonMobil Guyana Limited, an affiliate of Exxon Mobil Corporation (NYSE:NYSE:XOM).
Under the terms of the contract, TechnipFMC will be responsible for the project management, engineering, and manufacturing of 48 subsea trees, 12 manifolds, and the associated controls and tie-in equipment. Jonathan Landes, President of Subsea at TechnipFMC, stated that ExxonMobil Guyana will be utilizing their Subsea 2.0® systems and manifolds, which are designed to provide schedule certainty for the development of the project.
TechnipFMC has a history of collaboration with ExxonMobil Guyana, having been awarded multiple subsea production system contracts since 2017, starting with the Liza Phase 1 project. The company has already delivered over 100 subsea trees for ExxonMobil Guyana, which is part of one of the world's most rapidly developing basins.
As part of its commitment to local development, TechnipFMC currently employs nearly 140 Guyanese workers and anticipates further local hiring and training to support this new award. This contract is expected to be included in TechnipFMC’s inbound orders for the second quarter of 2024.
TechnipFMC is known for its integrated projects, products, and services across the traditional and new energy industries. With two business segments, Subsea and Surface Technologies, the company aims to transform project economics for clients, focusing on reducing carbon intensity and supporting energy transition ambitions.
InvestingPro Insights
As TechnipFMC (NYSE:FTI) secures a new contract for the Whiptail project in Guyana, investors are closely monitoring the company's financial health and market performance. With an adjusted market capitalization of $11.12 billion and a significant revenue growth in the last twelve months as of Q4 2023, TechnipFMC shows a solid increase in its financial metrics. The company's revenue growth stood at 16.38%, with a quarterly rise of 20.99%, reflecting a positive trend in its business operations.
However, the price-to-earnings (P/E) ratio appears elevated at 488.37, which suggests a high earnings multiple. Even when adjusted for the last twelve months, the P/E ratio is at 89.96, indicating that the stock may be trading at a premium compared to its earnings. This could be a point of consideration for investors looking at the value aspect of the stock. The company's stock also trades with low price volatility, which might appeal to investors seeking stability in their portfolio.
From an operational standpoint, TechnipFMC's gross profit margin for the last twelve months as of Q4 2023 was reported at 17.17%, which may be perceived as weak when compared to industry standards. This could signal potential challenges in maintaining profitability, despite the anticipated sales and net income growth for the current year. Investors interested in a deeper analysis can explore additional InvestingPro Tips for TechnipFMC, which include insights on debt levels, stock performance, and profitability predictions. Currently, there are 13 additional tips available on InvestingPro.
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