8-KEarnings & ResultsFinancial EventsRegulation FD+1

TechnipFMC plc 8-K Report, Financial Results (Jul 24, 2017)

Filed July 24, 2017For Securities:FTI

Summary

TechnipFMC plc (FTI) has filed an 8-K report on July 24, 2017, disclosing a significant accounting issue. The company's Audit Committee concluded that previously issued unaudited financial statements for the quarter ended March 31, 2017, contained material errors and should no longer be relied upon. These errors were related to the calculation of foreign currency effects on certain engineering and construction projects, resulting in an overstatement of net income by $209.5 million, or $0.45 per share. As a consequence of these errors, TechnipFMC identified a material weakness in its internal control over financial reporting as of March 31, 2017. The company plans to restate the affected financial statements through an amendment to its Form 10-Q and has implemented revisions and additional controls to prevent recurrence. Investors should note that the company will be releasing its Q2 2017 earnings on July 26, 2017, and the guidance for this period will exclude foreign currency effects.

Key Highlights

  • 1TechnipFMC plc (FTI) will restate its Q1 2017 financial statements due to material errors in foreign currency calculations.
  • 2The errors resulted in an overstatement of Q1 2017 net income by $209.5 million, or $0.45 per share.
  • 3A material weakness in internal control over financial reporting was identified as of March 31, 2017.
  • 4The company has implemented corrective actions and additional controls to address the identified weakness.
  • 5TechnipFMC will release its Q2 2017 earnings on July 26, 2017, with guidance excluding foreign currency effects.
  • 6The company's Q1 2017 financial statements filed on May 4, 2017, are no longer considered reliable.

Frequently Asked Questions

The errors were related to the calculation of foreign currency effects on certain engineering and construction projects. These inaccuracies led to an overstatement of net income for the quarter ended March 31, 2017.

The net income attributable to the company for the quarter ended March 31, 2017, was overstated by $209.5 million, which equates to $0.45 per share.

A material weakness indicates that the company's internal controls over financial reporting are not robust enough to prevent or detect material misstatements in a timely manner. While TechnipFMC is implementing corrective actions, investors should be aware of potential ongoing risks until these controls are proven effective.

TechnipFMC stated it would file an amendment to its Form 10-Q for the quarter ended March 31, 2017, with the restated financial statements. The company is also scheduled to release its Q2 2017 earnings on July 26, 2017.