Record Quarterly Subsea Revenue for FMC Technologies

FMC Technologies, Inc. reported fourth quarter 2013 revenue of $2.0 billion, up 11 percent from the prior-year quarter.

Diluted earnings per share were $0.74 compared to $0.50 in the prior-year quarter. The quarterly earnings included a charge related to the 2013 Multi Phase Meters earn-out adjustment of $11.1 million or $0.05 per share, compared to a $17.5 million or $0.07 per share charge in the prior-year quarter.

Total inbound orders were $1.8 billion and included $1.0 billion in Subsea Technologies orders. Backlog for the Company was $7.0 billion, including Subsea Technologies backlog of $6.0 billion.

Full Year 2013 Results

Total Company revenue for 2013 was $7.1 billion, and operating profit was $879.6 million. The full year 2013 diluted earnings per share were $2.10.

“We are pleased to report our twelfth consecutive year of earnings growth. Diluted earnings per share of $2.10 increased 18 percent year over year,” said John Gremp, Chairman, President and CEO of FMC Technologies. “We delivered record quarterly subsea revenue and operating profit on improved execution in the fourth quarter. For 2014, we expect to see another year of subsea revenue growth along with margin expansion for Subsea Technologies as the outlook for activity remains strong.”

“In Surface Technologies our international surface wellhead business continues to deliver exceptional results. We have strengthened our position in strategic international markets and expect strong operational performance to continue into 2014.”

Review of Operations – Fourth Quarter 2013

Subsea Technologies

Subsea Technologies fourth quarter revenue was $1.4 billion, up 13 percent from the prior-year quarter.

Subsea Technologies operating profit was up 44 percent from the prior-year quarter to $209.5 million primarily as a result of volume growth and improved execution. The revenue and operating profit also includes a $23.3 million net benefit associated with a retroactive Angolan tax adjustment.

Subsea Technologies inbound orders for the fourth quarter were $1.0 billion and backlog was $6.0 billion.

Surface Technologies

Surface Technologies fourth quarter revenue was $489.0 million, up 10 percent from the prior-year quarter driven by higher volume in surface wellhead.

Surface Technologies operating profit increased five percent from the prior-year quarter to $68.1 million driven by volume growth in the international surface wellhead business.

Surface Technologies inbound orders for the fourth quarter were $622.2 million and backlog was $742.4 million.

Energy Infrastructure

Energy Infrastructure fourth quarter revenue was $172.6 million, up three percent from the prior-year quarter, while operating profit decreased 20 percent from the prior-year quarter to $22.6 million.

Energy Infrastructure inbound orders for the fourth quarter were $160.8 million and backlog was $288.4 million.

Corporate Items

Corporate expense in the fourth quarter was $13.1 million, an increase of $1.7 million from the prior-year quarter. Other revenue and other expense, net, decreased $30.0 million from the prior-year quarter to $10.0 million, due largely to a favorable variance of $12.1 million in foreign exchange gain, a decrease of $6.4 million related to the earn-out associated with the acquisition of Multi Phase Meters, and a favorable change in LIFO inventory costs of $5.8 million.

The Company ended the quarter with net debt of $973.2 million. Net interest expense was $8.6 million in the quarter.

The Company repurchased approximately 884,000 shares of common stock in the quarter, at an average cost of $51.38 per share.

Depreciation and amortization for the fourth quarter was $56.8 million, up $4.9 million from the sequential quarter. Capital expenditures for the fourth quarter were $76.6 million.

The Company recorded an effective tax rate of 33.7 percent for the fourth quarter, which includes the impact of the Angolan tax adjustment and the Multi Phase Meters earn-out.

Summary and Outlook

FMC Technologies reported fourth quarter diluted earnings per share of $0.74.

Total inbound orders of $1.8 billion in the fourth quarter included $1.0 billion in Subsea Technologies orders. The Company’s backlog stands at $7.0 billion, including Subsea Technologies backlog of $6.0 billion.

The Company’s guidance range for 2014 diluted earnings per share is $2.55 to $2.75.

Press Release, February 07, 2014; Image: FMC Technologies