FMC Technologies Sees Profits Plunge

FMC Technologies, has recorded a sharp profit drop in the second quarter 2016 as the weak market drove its revenue down, especially in the surface technologies division.

The Houston-based subsea specialist generated net income of $2.2 million, or $0.01 per diluted share, on revenue of $1.2 billion, versus net income of $108 million, or $0.46 per diluted share on revenue of $1.7 billion in the year-ago quarter.

Second-quarter diluted EPS was $0.22, excluding total pre-tax charges of $61 million, or $0.21 per diluted share.

Revenue was down 32 per cent from the corresponding period in 2015.

FMC Technologies’ subsea division generated revenue of $854.2 million in the Q2 2016, a drop of 31 percent from the year-ago quarter, including $29.2 million negative impact of strong USD.

In addition, the above menitioned Surface Technologies business has seen a 40 percent decline in revenues from the prior-year quarter, mostly due to the 53 percent decrease in the North American rig count.

“Subsea Technologies delivered solid operating margins as we continue to benefit from our execution momentum as well as the savings from our ongoing restructuring activities,” said John Gremp, chairman and CEO of FMC Technologies. “The further deterioration in North America led to a significant impact to our Surface Technologies earnings.”

The company reported total inbound orders of some $538 million, of which $334 million is in subsea.

At the end of Q2 2016, FMC Technologies’ backlog stood at $3.4 billion ($5.5 billion same time last year), including Subsea Technologies backlog of $2.9 billion.

“Although the timing around the sanctioning of deepwater projects remains uncertain, we continue to focus our strategy on lowering the cost of deepwater development, and I am confident that our merger with Technip will allow us to further improve project economics,” Gremp added.

Subsea World News Staff