FMC 2Q07 Revenue up 21% Over 2Q06

FMC Technologies (NYSE:FTI) reported second quarter 2007 revenue of $1.2 billion, up 21 percent over second quarter of 2006 primarily on the strength of its subsea systems, surface wellhead and fluid control businesses. Diluted earnings per share from continuing operations were $1.10, up 69 percent from $0.65 per diluted share in the prior-year quarter.

Inbound orders in the quarter totaled $1.6 billion. Backlog reached $3.4 billion, including a record $2.4 billion for subsea systems.

Operating margins in the energy segments were strong year-over-year, especially in Energy Production. Backlog is at another record high and future subsea project opportunities continue to be robust.

"The outlook for 2007 remains positive with our technology as the catalyst," said Peter D. Kinnear, President and Chief Executive Officer. "We have delivered, according to schedule, the industry's first full-scale subsea separation system. This new separation technology positions us to drive growth beyond 2007."

Energy Production Systems

Energy Production Systems' second quarter revenue of $721.5 million increased 28 percent over the prior-year quarter, due mainly to higher subsea systems volume. Revenue for subsea systems was $577 million in the quarter, up 28 percent from the prior-year quarter. Surface wellhead revenue improved 26 percent from the prior-year quarter.

Energy Production Systems' operating profit of $70.1 million increased 70 percent over the prior-year quarter. The operating profit increase was mainly due to increased subsea systems volume as well as operating margin improvement. Surface wellhead operating profit also improved due to higher volume and operating margins. Favorable foreign currency also contributed to the improvement.

Energy Production Systems' inbound orders were $1.1 billion for the second quarter, up $409.1 million over the prior-year quarter due to the strength of orders for subsea systems. Subsea systems inbound orders were $908.0 million in the quarter, up 67 percent from the prior-year quarter. Energy Production backlog of $2.7 billion was up 56 percent from the prior-year quarter and up 16 percent sequentially. Subsea backlog was a record $2.4 billion.

Energy Processing Systems

Energy Processing Systems' second quarter revenue of $184.0 million was 16 percent higher than the prior-year quarter. The revenue improvement over the prior-year quarter was primarily the result of strong demand from service companies for WECO(R)/Chiksan(R) equipment, up 22 percent from the prior-year quarter and 8 percent sequentially. The revenue improvement over the prior-year quarter was also due to a 32 percent increase for measurement systems on strong demand for metering systems.

Energy Processing Systems' second quarter operating profit of $35.0 million was 30 percent higher than the prior-year quarter. The operating profit improvement is largely the result of higher WECO/Chiksan equipment volume and higher measurement systems' volume and operating margins.

Energy Processing Systems' inbound orders were $188.7 million for the second quarter, up 3 percent over the prior-year quarter. Backlog is $337.5 million, up 42 percent from the prior-year quarter on strong WECO/Chiksan and measurement systems orders.

FoodTech

FoodTech's revenue of $165.3 million in the second quarter was up 12 percent from the prior-year quarter due to increased sales of food processing equipment. Operating profit of $12.6 million was down $3.2 million from the prior-year quarter due mainly to a less profitable sales mix and expenses related to intellectual property defense.

Inbound orders totaled $151.3 million in the quarter, up 22 percent from the prior-year quarter. Backlog was $184.5 million, up 31 percent from the prior-year quarter. This backlog level supports the company's expectation that full year FoodTech operating profit will exceed 2006.

Airport Systems

Airport Systems' second quarter revenue of $85.2 million was up 8 percent compared to the second quarter of 2006 due to increased demand for equipment and services. Airport Systems' second quarter operating profit of $5.7 million was up 19 percent from the prior-year quarter due in large part to the strength of the airport services business.

Inbound orders totaled $130.7 million in the quarter, up 6 percent from the prior-year quarter. Backlog was $219.7 million, up 26 percent from the prior-year quarter.

Corporate Items

Corporate expense in the second quarter of 2007 was $9.0 million, $0.4 million above the prior-year quarter. Other expense, net, of $3.9 million decreased $5.1 million due mainly to foreign currency gains in the quarter.

Net interest expense in the second quarter of 2007 was $3.7 million, up from $1.4 million in the prior-year quarter due to higher debt.

Net debt of $265.5 million was up $15.3 million from the prior quarter. In the quarter, the Company repurchased 788,445 shares of common stock for $55.9 million. Cash used for stock repurchases was mostly offset by reductions in working capital.

Depreciation and amortization for the second quarter of 2007 was $21.1 million, up from $17.4 million in the prior-year quarter.

Capital expenditures during the second quarter of 2007 totaled $41.5 million, up from $32.2 million in the prior-year quarter due mainly to continued capacity expansion projects in Energy Systems.

Summary and Outlook

FMC Technologies reported earnings per diluted share from continuing operations of $1.10, up 69 percent from the prior-year quarter. On the strength of subsea, fluid control, and surface wellhead, Energy Systems' revenue was up 25 percent and operating profit up 54 percent. Subsea sales increased 28 percent from the prior-year quarter and its backlog reached a record $2.4 billion.

The energy businesses are expected to have another strong year in 2007, primarily driven by the secular growth of subsea systems. The Company increased its estimate for full year 2007 earnings per diluted share from continuing operations to a range of $4.10 to $4.25.

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