FMC Technologies Rides High with $1.2B for 4Q 2009
FMC Technologies reported fourth quarter 2009 revenue from continuing operations of $1.2 billion, including a record $822 million in subsea systems. Diluted earnings per share from continuing operations were $0.75 compared to $0.74 in the prior-year quarter.
Led by higher operating margin and volume in subsea systems, fourth quarter operating profit in Energy Production Systems increased 10 percent from the fourth quarter of 2008. Operating profit in Energy Processing Systems was down 49 percent from the prior-year quarter due mainly to continued market weakness in the fluid control business.
Full Year 2009 Results
The 2009 total company revenue of $4.4 billion was led by subsea systems, whose revenue increased three percent to a record $3.1 billion. Total company operating profit increased six percent to a record $618.5 million. The full year 2009 diluted earnings per share from continuing operations of $2.87 were up six percent from the 2008 diluted earnings per share of $2.72.
"As a result of a healthy backlog and strong execution, we are pleased to report another year of earnings growth," said Peter D. Kinnear, Chairman, President and Chief Executive Officer. "While we anticipate 2010 revenue to be slightly lower than 2009, we expect a significant rebound in orders and a rebuilding of our backlog. Our estimate for 2010 diluted earnings per share is $2.45 to $2.65."
Review of Operations - Fourth Quarter 2009
Energy Production Systems
Energy Production Systems' record fourth quarter revenue of $988.8 million increased $16.0 million from the prior-year quarter. Revenue for subsea systems was a record $822 million, up four percent from the prior-year quarter. Surface wellhead revenue was down six percent from the fourth quarter of 2008 but was up five percent compared to the third quarter of 2009.
Energy Production Systems' operating profit of $131.2 million increased 10 percent over the prior-year quarter. The increase in operating profit was due to higher operating margins across the segment and increased volume in subsea systems.
Energy Production Systems' inbound orders for the fourth quarter were $584.5 million, including subsea systems orders of $411 million. Backlog for Energy Production Systems was $2.3 billion, including $2.0 billion in subsea systems at the end of the fourth quarter.
Energy Processing Systems
Energy Processing Systems' fourth quarter revenue of $177.1 million was 23 percent lower than the prior-year quarter but was up seven percent from the third quarter of 2009. The sequential revenue increase came primarily from the measurement solutions business.
Energy Processing Systems' fourth quarter operating profit of $20.6 million was down 49 percent from the prior-year quarter, primarily driven by lower volume and operating margin in the fluid control business resulting from weakness in the North American market.
Energy Processing Systems' inbound orders were $171.6 million for the fourth quarter, which was up 22 percent sequentially driven in part by the fluid control business and was at the highest level since the third quarter of 2008. Backlog for the segment finished the quarter at $221.1 million.
Corporate expense in the fourth quarter was $10.2 million, an increase of $1.1 million from the prior-year quarter.
Other expense, net, was $5.4 million, a decrease of $16.4 million from the prior-year quarter. The decrease from the prior-year quarter included $7.0 million in lower LIFO charges, a reduction of $5.3 million in net foreign exchange losses, and a reduction of $4.7 million in pension expenses.
The company ended the quarter with net cash of $40.6 million. Net interest expense was $3.0 million in the quarter.
The company repurchased 376 thousand shares of common stock in the quarter for $21.5 million and now has 5.4 million shares remaining in its stock repurchase authorization.
Depreciation and amortization for the fourth quarter was $28.3 million, up $3.7 million from the previous quarter, and capital expenditures totaled $34.0 million.
The company recorded an effective tax rate of 30.3 percent for the fourth quarter.
Summary and Outlook
FMC Technologies reported diluted earnings per share from continuing operations of $0.75, which was an increase from $0.74 in the prior-year quarter. Fourth quarter revenue from continuing operations was $1.2 billion, including a record $822 million in subsea systems.
Energy Production Systems' operating profit was up 10 percent over the fourth quarter of 2008. Total company operating profit for the full year 2009 increased six percent to a record $618.5 million.
The company provided guidance for 2010 diluted earnings per share from continuing operations in a range of $2.45 to $2.65.
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