FMC Technologies CEO Expects Margins to Improve
FMC Technologies, Inc. has reported third quarter 2013 revenue of $1.7 billion, up 22 percent from the prior-year quarter. Diluted earnings per share were $0.49 compared to $0.41 in the prior-year quarter.
The quarterly earnings included a charge related to the 2013 Multi Phase Meters earn-out adjustment of $8.5 million or $0.04 per share, compared to a $10.1 million or $0.04 per share charge in the prior-year quarter.
Total inbound orders were $2.4 billion and included $1.7 billion in Subsea Technologies orders. Backlog for the Company was $7.4 billion, including Subsea Technologies backlog of $6.5 billion.
“Subsea Technologies has achieved a record backlog of $6.5 billion as we inbounded $1.7 billion of awards in the third quarter,” said John Gremp, Chairman and CEO of FMC Technologies. “Although Subsea Technologies has delivered four consecutive quarters of greater than $1 billion of revenue, our margins for the quarter were disappointing. We are addressing the isolated causes of our shortfall and expect margins to improve going forward.”
“Surface Technologies results benefited from another solid quarter of performance in surface wellhead, and we expect to see strong results from this segment through the end of the year as the strength in international surface wellhead continues.”
Review of Operations — Third Quarter 2013
Subsea Technologies third quarter revenue was $1.1 billion, up 20 percent from the prior-year quarter.
Subsea Technologies operating profit was up 10 percent from the prior-year quarter to $121.1 million as a result of volume growth.
Subsea Technologies inbound orders for the third quarter were $1.7 billion and backlog was $6.5 billion.
Surface Technologies third quarter revenue was $455.9 million, up 26 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 increased 30 percent from the prior-year quarter to $74.5 million driven by volume growth in surface wellhead.
Surface Technologies inbound orders for the third quarter were $477.0 million and backlog was $608.1 million.
Energy Infrastructure third quarter revenue was $152.4 million, up 15 percent from the prior-year quarter.
Energy Infrastructure operating profit increased 40 percent from the prior-year quarter to $17.9 million driven by improved performance in measurement solutions and separations systems.
Energy Infrastructure inbound orders for the third quarter were $166.2 million and backlog was $299.0 million.
Corporate expense in the third quarter was $10.4 million, a decrease of $1.1 million from the prior-year quarter. Other revenue and other expense, net, decreased $2.2 million from the prior-year quarter to $27.1 million, which includes a charge of $8.5 million related to the earn-out associated with the acquisition of Multi Phase Meters.
The Company ended the quarter with net debt of $1.2 billion. Net interest expense was $8.2 million in the quarter.
The Company repurchased approximately 397,000 shares of common stock in the quarter, at an average cost of $55.19 per share.
Depreciation and amortization for the third quarter was $51.9 million, down $0.2 million from the sequential quarter. Capital expenditures for the third quarter were $80.8 million.
The Company recorded an effective tax rate of 30.9 percent for the third quarter.
Summary and Outlook
FMC Technologies reported third quarter diluted earnings per share of $0.49.
Total inbound orders of $2.4 billion in the third quarter included $1.7 billion in Subsea Technologies orders. The Company’s backlog stands at $7.4 billion, including Subsea Technologies backlog of $6.5 billion.
The Company adjusted guidance for 2013 diluted earnings per share to a range of $2.00 to $2.10.
Press Release, October 23, 2013