FMC Technologies Reports Strongest Quarter of Subsea Orders, USA

FMC Technologies, Inc. reported second quarter 2013 revenue of $1.7 billion, up 14 percent from the prior-year quarter. Diluted earnings per share were $0.44 compared to $0.46 in the prior-year quarter. The quarterly earnings included a charge related to the 2013 Multi Phase Meters earn-out adjustment of $9.1 million or $0.04 per share.

Total inbound orders were $3.2 billion and included $2.6 billion in Subsea Technologies orders. Backlog for the Company was $6.7 billion, including Subsea Technologies backlog of $5.9 billion.

“We are pleased to report our strongest quarter of subsea orders on record, which included Total’s Egina award and our second call off of the pre-salt tree award from Petrobras,” said John Gremp, Chairman and CEO of FMC Technologies. “Additionally, we are continuing to see the margins in our backlog improve and anticipate improvement in our Subsea Technologies results throughout the remainder of the year.”

“Surface Technologies results were better than expected as surface wellhead delivered another quarter of solid performance and fluid control activity began to stabilize.”

Review of Operations — Second Quarter 2013

Subsea Technologies

Subsea Technologies second quarter revenue was $1.1 billion, up 19 percent from the prior-year quarter.

Subsea Technologies operating profit was up 12 percent from the prior-year quarter to $123.4 million as a result of volume growth. Prior-year results included a $13.2 million net benefit associated with the Schilling Robotics acquisition.

Subsea Technologies inbound orders in the second quarter were $2.6 billion and backlog was $5.9 billion.

Surface Technologies

Surface Technologies second quarter revenue was $440.2 million, up six percent from the prior-year quarter driven by higher volume in surface wellhead and the addition of completion services which more than offset the reduced fluid control sales.

Surface Technologies operating profit decreased 32 percent from the prior-year quarter to $57.3 million as the result of reduced fluid control activity in North America and the impact of Canadian breakup on completion services.

Surface Technologies inbound orders for the second quarter were $501.0 million and backlog was $581.7 million.

Energy Infrastructure

Energy Infrastructure second quarter revenue was $158.0 million, up 13 percent from the prior-year quarter.

Energy Infrastructure operating profit more than doubled from the prior-year quarter to $18.5 million driven by improved performance in loading systems and measurement solutions.

Energy Infrastructure inbound orders for the second quarter were $145.9 million and backlog was $281.6 million.

Corporate Items

Corporate expense in the second quarter was $12.5 million, an increase of $2.1 million from the prior-year quarter. Other revenue and other expense, net, increased $1.8 million from the prior-year quarter to $31.5 million, which includes a charge of $9.1 million related to the earn-out associated with the acquisition of Multi Phase Meters.

The Company ended the quarter with net debt of $1.3 billion. Net interest expense was $8.8 million in the quarter.

The Company repurchased approximately 404,000 shares of common stock in the quarter, at an average cost of $54.45 per share.

Depreciation and amortization for the second quarter was $52.1 million, up $3.1 million from the sequential quarter. Capital expenditures for the second quarter were $77.8 million.

The Company recorded an effective tax rate of 28.2 percent for the second quarter.

Summary and Outlook

FMC Technologies reported second quarter diluted earnings per share of $0.44, which included a charge related to the 2013 Multi Phase Meters earn-out adjustment of $9.1 million or $0.04 per share.

Total inbound orders of $3.2 billion in the second quarter included $2.6 billion in Subsea Technologies orders. The Company’s backlog stands at $6.7 billion, including Subsea Technologies backlog of $5.9 billion.

The Company raised the lower end of its guidance which results in a 2013 diluted earnings per share range of $2.10 to $2.25 as Subsea Technologies and Surface Technologies operating profit is expected to improve during the remainder of the year.

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Press Release, July 24, 2013