FMC Technologies' Backlog Buoyed by Subsea Systems in 2Q

FMC Technologies has reported second quarter 2009 revenue from continuing operations of $1.1 billion. Diluted earnings per share from continuing operations were $0.84, up 12 percent from $0.75 in the prior-year quarter and up 50 percent from $0.56 in the first quarter of 2009.

Led by subsea systems, second quarter operating profit in Energy Production Systems increased 34 percent from the second quarter of 2008. The total operating profit for Energy Production Systems and Energy Processing Systems was a record $168.6 million.

Total backlog for the company ended the second quarter at $3.1 billion, including $2.5 billion for subsea systems.

"Subsea continues to be the growth driver of our business. In the quarter, we saw a profitable mix of projects and services drive our subsea operating margin, which was offset by North American operating margins in our other businesses," said Peter D. Kinnear, Chairman, President and Chief Executive Officer. "As a result of our strong second quarter, we are increasing our estimate of 2009 diluted earnings per share from continuing operations to a range of $2.55 to $2.65."

Energy Production Systems

Energy Production Systems' second quarter revenue of $933.9 million decreased 1 percent from the prior-year quarter, but increased 7 percent from the first quarter of 2009. Revenue for subsea systems was $778 million for the second quarter, up 9 percent from the first quarter. Surface wellhead revenue was flat compared to the first quarter of 2009.

Energy Production Systems' record operating profit of $140.1 million increased 34 percent over the prior-year quarter. The increase was due to higher operating margins in subsea systems that are not expected to be sustained in the second half of 2009.

Energy Production Systems' inbound orders for the second quarter of 2009 were $669.0 million, including subsea systems orders of $529 million. Backlog for Energy Production Systems was $2.8 billion, including $2.5 billion in subsea backlog at the end of the second quarter.

Energy Processing Systems

Energy Processing Systems' second quarter revenue of $174.1 million was 21 percent lower than the prior-year quarter and 4 percent lower than the first quarter of 2009. The revenue decrease came primarily from the fluid control business, which continues to be impacted by the reduction in North American pressure pumping activity.

Energy Processing Systems' second quarter operating profit of $28.5 million was down 34 percent from the prior-year quarter but was flat compared to the first quarter of this year.

Energy Processing Systems' inbound orders were $147.5 million for the second quarter, and its backlog finished the quarter at $252.0 million.

Corporate Items

Corporate expense in the second quarter was $9.1 million, a decrease of $0.8 million from the prior-year quarter.

Other expense, net, was $5.8 million, an increase of $6.0 million from the prior-year quarter. The increase was primarily due to a reduction of foreign exchange gains as compared to the second quarter of 2008.

The company ended the quarter with net debt of $74.4 million. Net interest expense was $2.3 million in the quarter.

The company repurchased 1.4 million shares of common stock in the quarter for $52.2 million and now has 6.7 million shares remaining in its stock repurchase authorization.

Depreciation and amortization for the second quarter was $20.8 million, up $1.5 million from the previous quarter, and capital expenditures totaled $29.5 million.

The company recorded an effective tax rate of 30.0 percent for the second quarter.

Summary and Outlook

FMC Technologies reported diluted earnings per share from continuing operations of $0.84, up 12 percent from the prior-year quarter.

Energy Production Systems' operating profits were up 34 percent over the second quarter of 2008. Total operating profit for Energy Production Systems and Energy Processing Systems was a record $168.6 million. Total company backlog was $3.1 billion at the end of the quarter.

As a result of its strong second quarter, the company increased its estimate for 2009 diluted earnings per share from continuing operations to a range of $2.55 to $2.65.
 

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