FMC Technologies' Earnings Up 8%, Buoyed by $3.4B Backlog
FMC Technologies has reported first quarter 2009 revenue from continuing operations of $1.1 billion, up 1 percent over the first quarter of 2008. Diluted earnings per share from continuing operations were $0.56, up 8 percent from $0.52 per diluted share in the prior-year quarter. Diluted earnings per share of $0.62 from the first quarter of 2008 included $0.10 per share from the FoodTech and Airport Systems businesses that were fully divested in July of 2008.
Led by subsea systems, the first quarter operating profit in Energy Production Systems increased 10 percent as compared to the first quarter of 2008. Operating profit in Energy Processing Systems was down 27 percent due mainly to the rapid decrease in North American pressure pumping activity. Overall, operating profit for the company was flat compared to the prior-year quarter.
"Given the current economic conditions in our industry including the significant decline in North American land activity, we are very encouraged by our first quarter results," said Peter D. Kinnear, Chairman, President and Chief Executive Officer. "We continue to operate in an uncertain macroeconomic environment, but we benefit from $3.4 billion in backlog. However, given the weakness in North America, we are narrowing our estimate of 2009 diluted earnings per share from continuing operations to a range of $2.40 to $2.50."
Energy Production Systems
Energy Production Systems' first quarter revenue of $872.3 million increased 2 percent over the prior-year quarter due to increased subsea systems sales. Revenue for subsea systems was $716 million for the quarter, up 2 percent from the prior-year quarter. Surface wellhead revenue was comparable to the first quarter of 2008.
Energy Production Systems' operating profit of $104.4 million increased 10 percent over the prior-year quarter. The increase was due to higher volume and operating margin in subsea systems.
Energy Production Systems' inbound orders for the first quarter of 2009 were $614.3 million, including subsea systems orders of $481 million. Backlog for Energy Production Systems was $3.1 billion and included $2.7 billion in subsea backlog at the end of the first quarter.
Energy Processing Systems
Energy Processing Systems' first quarter revenue of $181.0 million was 11 percent lower than the prior-year quarter. The revenue decrease came primarily from the fluid control business, which was significantly impacted by the reduction in North American pressure pumping activity. Energy Processing Systems' first quarter operating profit of $28.5 million was down 27 percent from the prior-year quarter, again, primarily from the impact of decreased North American pressure pumping activity on the fluid control business.
Energy Processing Systems' inbound orders were $146.5 million for the first quarter and backlog was $278.7 million.
Corporate expense in the first quarter of 2009 was $6.8 million, a decrease of $2.1 million from the prior-year quarter due in part to lower professional service expenses.
Other expense, net, was $25.0 million, an increase of $0.7 million from the prior-year quarter. Significant items in the quarter included the acceleration of stock-based compensation expenses in accordance with accounting standards and foreign exchange losses, which resulted in expenses of $5.7 and $7.3 million, respectively.
The company ended the quarter with net debt of $82.3 million. Net interest expense was $2.1 million in the quarter.
The company repurchased 1.5 million shares of common stock in the quarter for $43.5 million and now has 8.1 million shares remaining in its stock repurchase authorization. Depreciation and amortization for the first quarter was $19.3 million, up slightly from the previous quarter. Capital expenditures during the first quarter totaled $25.4 million. The company recorded an effective tax rate of 28.0 percent for the first quarter.
Summary and Outlook
FMC Technologies reported diluted earnings per share from continuing operations of $0.56, up 8 percent from the prior-year quarter. Energy Production Systems' operating profits were up 10 percent over the first quarter of 2008. The total company backlog was $3.4 billion at the end of the quarter.
The company narrowed its estimate for 2009 diluted earnings per share from continuing operations to a range of $2.40 to $2.50.
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