USA: FMC Technologies Revenues Up 10 Pct

FMC Technologies, Inc. reported third quarter 2012 revenue of $1.4 billion, up 10 percent from the prior-year quarter.

Diluted earnings per share were $0.41 compared to $0.50 in the prior-year quarter as improved Subsea Technologies’ results were more than offset by higher non-operating expenses, a weaker North American Surface Technologies market, and less favorable results in our Energy Infrastructure segment.

Total inbound orders were $1.4 billion and included $885.5 million in Subsea Technologies’ orders. Backlog for the Company was $5.3 billion, including Subsea Technologies’ backlog of $4.4 billion.

 “Subsea Technologies’ margins increased again this quarter to 12.4 percent,” said John Gremp, Chairman and CEO of FMC Technologies. “Execution has improved and we expect continued solid performance in the coming quarters. We remain positive on the overall subsea market outlook, and expect Subsea Technologies’ revenue to approach $4 billion in 2012. However, North American activity weighs on our Surface Technologies’ outlook. We are revising our full year diluted earnings per share range to $1.85 to $1.95.”

 Review of Operations — Third Quarter 2012

Subsea Technologies

Subsea Technologies’ third quarter revenue was $929.2 million, up 11 percent from the prior-year quarter.

Subsea Technologies’ operating profit increased 20 percent from the prior-year quarter to $115.5 million due to improved performance and greater volume.

Subsea Technologies’ inbound orders in the third quarter were $885.5 million and backlog was $4.4 billion.

 Surface Technologies

Surface Technologies’ third quarter revenue of $362.8 million was eight percent higher than the prior-year quarter, driven by higher volumes in surface wellhead.

Surface Technologies had operating profit of $57.5 million in the third quarter, down 13 percent from the prior-year quarter as the result of a less favorable sales mix.

Surface Technologies’ inbound orders were $340.3 million in the third quarter and backlog for the segment finished the quarter at $554.6 million.

 Energy Infrastructure

Energy Infrastructure’s third quarter revenue was $133.2 million, up three percent from the prior-year quarter.

Energy Infrastructure had operating profit of $7.7 million in the third quarter, down 45 percent from the prior-year quarter driven primarily by lower margin projects in direct drive systems and separation systems.

Energy Infrastructure’s inbound orders for the third quarter were $157.5 million and backlog was $312.7 million.

Corporate Items

Corporate expense in the third quarter was $11.5 million, an increase of $2.2 million from the prior-year quarter. Other revenue and other expense, net, was $29.3 million, an increase of $32.0 million from the prior-year quarter. This was largely due to an increase of $11.9 million related to the estimated earn-out associated with the acquisition of Multi Phase Meters and an $8.5 million increase in pension expense.

The Company ended the quarter with net debt of $962.9 million. Net interest expense was $6.0 million in the quarter.

The Company repurchased approximately 690,000 shares of common stock in the quarter, at an average cost of $44.90 per share.

Depreciation and amortization for the third quarter was $33.8 million, down $1.6 million from the sequential quarter. Capital expenditures for the third quarter were $91.3 million.

The Company recorded an effective tax rate of 26.1 percent for the third quarter.

 Summary and Outlook

FMC Technologies reported third quarter diluted earnings per share of $0.41.

Full year Subsea Technologies’ revenue will approach $4 billion.

Total inbound orders of $1.4 billion in the third quarter included $885.5 million in Subsea Technologies’ orders. The Company’s backlog stands at $5.3 billion, including Subsea Technologies’ backlog of $4.4 billion.

North American Surface Technologies activity is declining at a faster pace than was anticipated and is having a greater impact on second half results.

The Company revised its guidance for 2012 diluted earnings per share to a range of $1.85 to $1.95.

[mappress]

Press Release, October 24, 2012; Image: fmc