USA: FMC Technologies 3Q 2010 Revenues Down by 12% Compared to 3Q 2009

FMC Technologies, Inc. today reported third quarter 2010 revenue from continuing operations of $960 million, down 12 percent from the prior-year quarter due primarily to lower subsea systems revenue. Diluted earnings per share from continuing operations were $0.66 compared to $0.73 in the prior-year quarter.

Total backlog increased 28 percent from the second quarter of 2010 to $3.6 billion and included $3.1 billion in subsea systems. It was the third consecutive quarterly backlog increase and was mainly driven by $1.2 billion in subsea systems orders. The 2010 year-to-date subsea order amount of $3.0 billion is already the second highest annual total in FMC’s history.

“We had another strong quarter for subsea orders consistent with our positive outlook on the subsea market,” said Peter D. Kinnear, Chairman and Chief Executive Officer. “International orders helped to offset the impact from the Gulf of Mexico drilling moratorium, which will continue to negatively impact our subsea systems business in the fourth quarter and into 2011. We are raising our estimate of 2010 diluted earnings per share to a range of $2.90 to $2.95, which compares to our previous 2010 guidance of $2.70 to $2.90.”

Energy Production Systems

Energy Production Systems’ third quarter revenue was $770.1 million, including subsea systems revenue of $619 million. Lower subsea backlog at the beginning of the quarter and the timing of new project execution led to the lower subsea systems volume. Energy Production Systems’ operating profit of $105.9 million decreased from the prior-year quarter due mostly to lower volume and operating margin in the subsea systems business.

Energy Production Systems’ inbound orders for the third quarter were $1.4 billion, nearly double the inbound orders that were recorded in the third quarter of 2009. Subsea systems orders were $1.2 billion, the second highest quarter for subsea orders in FMC’s history. Backlog for Energy Production Systems was $3.4 billion including $3.1 billion in subsea systems. Both orders and backlog increased for the third consecutive quarter.

Energy Processing Systems

Energy Processing Systems’ third quarter revenue was $192.7 million, a 16 percent increase over the prior-year quarter. Energy Processing Systems’ third quarter operating profit of $34.5 million was up 40 percent from the prior-year quarter. The increase was mostly driven by higher volume and operating margin in the fluid control business, which had record revenue in the quarter.

Energy Processing Systems’ inbound orders were $193.7 million for the third quarter, a 43 percent increase compared to the prior-year quarter. The increases in revenue, operating profit and orders were predominately driven by the fluid control business, which continued to benefit from a high level of North American pressure pumping activity. Backlog for the segment was $263.9 million at the end of the quarter.

Corporate Items

Corporate expense in the third quarter was $10.2 million, an increase of $0.9 million from the prior-year quarter. Other expense, net, was $15.2 million, a decrease of $5.8 million from the prior-year quarter.

The Company ended the third quarter with net debt of $66.5 million. Net interest expense was $1.8 million in the quarter.

The Company repurchased 679 thousand shares of common stock in the quarter for $40.9 million and now has 2.5 million shares remaining in its stock repurchase authorization.

Depreciation and amortization for the third quarter was $24.7 million, up $1.0 million from the previous quarter, and capital expenditures totaled $26.3 million.

The Company recorded an effective tax rate of 28.7 percent for the third quarter.

Summary and Outlook

FMC Technologies reported third quarter revenue from continuing operations of $960 million and diluted earnings per share from continuing operations of $0.66.

Total Company backlog increased 28 percent from the second quarter of 2010 to $3.6 billion and included $3.1 billion in subsea systems. The backlog increase was mainly driven by $1.2 billion in subsea systems orders, which brought the year-to-date total for subsea systems orders to $3.0 billion.

The Company raised guidance for 2010 diluted earnings per share from continuing operations from the previous range of $2.70 to $2.90 to a new range of $2.90 to $2.95.

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Source: FMC Technologies, October  28, 2010;