FMC Technologies Revenue Up in Q2

FMC Technologies, Inc. reported second quarter 2014 revenue of $2.0 billion, up 16 percent from the prior-year quarter.

Diluted earnings per share were $0.95 compared to $0.44 in the prior-year quarter.  The quarterly earnings included a pre-tax $86 million gain, or $0.23 per diluted share, related to the sale of the Material Handling Products business.

Total inbound orders were $1.5 billion and included $850 million in Subsea Technologies orders.  Subsea Technologies backlog was $6.3 billion.

“Subsea Technologies produced strong sales and margins largely resulting from improved execution of backlog,” said John Gremp, Chairman, President and CEO of FMC Technologies. “We are pleased with the results from our focus on improving execution and have increased confidence of delivering mid-teen margins in our subsea business in the second half of the year.”

“In Surface Technologies, we are more optimistic with regard to the North American market, as we delivered another strong quarter of operating results in our fluid control business.  Based on this improved outlook, we are increasing our diluted earnings per share guidance to $2.70 to $2.80.”

Review of Operations – Second Quarter 2014

Subsea Technologies

Subsea Technologies second quarter revenue was $1.3 billion, up 18 percent from the prior-year quarter.

Operating profit was up 61 percent from the prior-year quarter to $194 million primarily as a result of better execution on a more favorable backlog.

Inbound orders for the second quarter were $850 million and backlog was $6.3 billion.

Surface Technologies

Surface Technologies second quarter revenue was $511 million, up 16 percent from the prior-year quarter.

Operating profit increased 38 percent from the prior-year quarter to $79 million driven by volume growth in the North American fluid control and international surface wellhead businesses.

Inbound orders for the second quarter were $502 million and backlog was $779 million.

Energy Infrastructure

Energy Infrastructure second quarter revenue was $149 million, down 6 percent from the prior-year quarter, while operating profit decreased 16 percent from the prior-year quarter to $18 million as reduced revenue from the sale of the of Material Handling Products business was partially offset by improved results in loading systems and separation systems businesses during the quarter.

Inbound orders for the second quarter were $108 million and backlog was $242 million.

Corporate Items

Corporate expense in the second quarter was $16.8 million, an increase of $4.3 million from the prior-year quarter. Other revenue and other expense, net, changed $99.5 million from the prior-year quarter to income of $68 million, due primarily to the pre-tax gain of $86 million of the Material Handlings Products disposition.

The Company ended the quarter with net debt of $928 million. Net interest expense was $8.3 million in the quarter.

The Company repurchased 470,600 shares of common stock in the quarter, at an average cost of $55.67 per share.

Depreciation and amortization for the second quarter was $58.4 million, up $4.3 million from the sequential quarter. Capital expenditures for the second quarter were $88 million.

The Company recorded an effective tax rate of 32.2 percent for the second quarter.

Summary and Outlook

FMC Technologies reported second quarter diluted earnings per share of $0.95, including the pre-tax $86 million gain, or $0.23 per diluted share, associated with the sale of the Material Handling Products business.

Total inbound orders of $1.5 billion in the second quarter included $850 million in Subsea Technologies orders. The Company’s backlog stands at $7.3 billion, including Subsea Technologies backlog of $6.3 billion.

The Company’s guidance range for 2014 diluted earnings per share has been increased to $2.70 to $2.80, which excludes the gain associated with the sale of the Material Handling Products business.

Press Release, July 23, 2014