During the June quarter TechnipFMC bought back 5.9 million of its own shares for $420.1 million — an average of roughly $71.20 apiece . The stock changed hands at about $69.10 intraday on October 7 . Whatever the board knew in the spring, it was willing to pay more for the equity then than the market will pay for it now.
What it was buying is a business with two parts and one story. Subsea — 90% of second-quarter revenue — designs, manufactures and installs the hardware that connects offshore wells to production facilities, increasingly selling the whole package under a single integrated contract covering engineering, procurement, construction and installation, which the company brands iEPCI . Surface Technologies, the remaining tenth, supplies wellheads and pressure-control equipment to onshore and shallow-water operators . The equity is a levered claim on offshore final investment decisions, and over the past year it has traded between $35.29 and $80.70 . It now sits roughly 14% below that high.
A fourteen percent drawdown with no guide-down attached
Nothing broke. At the second-quarter print on July 30, management said the quarter gave it the confidence to raise full-year expectations for total-company EBITDA , and the chief financial officer told investors Subsea revenue and adjusted EBITDA margin would both land near the top end of their guided ranges — $9.2–9.6 billion and 21–22% respectively . Subsea delivered a 23.2% adjusted EBITDA margin on revenue up 12.2% year over year , and free cash flow of $487.9 million funded $439.9 million of dividends and buybacks .
What repriced the stock was the order line. First-half Subsea inbound of $4,410.8 million came in 17% below the $5,338.6 million booked a year earlier , which puts the half-year ratio of orders booked to revenue billed at 0.94x. Subsea backlog of $15,833.2 million at June 30 was essentially unchanged from $15,810.0 million twelve months before — a contractor growing revenue at a double-digit rate on a backlog that...