FMC Technologies Reports Second Quarter 2010 Diluted Earnings per Share of $0.78
Highlights:
Strong subsea orders of $946 million
Total backlog increased six percent sequentially driven by subsea systems orders
Guidance range for 2010 diluted earnings per share maintained at $2.70 to $2.90
HOUSTON, July 26, 2010 /PRNewswire via COMTEX News Network/ -- FMC Technologies, Inc. (NYSE: FTI) today reported second quarter 2010 revenue from continuing operations of $1.0 billion. Diluted earnings per share from continuing operations were $0.78 compared to $0.84 in the prior-year quarter and $0.80 in the first quarter of 2010.
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Second quarter operating profit in Energy Production Systems decreased seven percent from the second quarter of 2009 due to lower volume which was partially offset by higher operating margin. Operating profit in Energy Processing Systems was up 17 percent from the prior-year quarter on higher volume and operating margin in the fluid control business.
Total Company backlog increased six percent from the first quarter of 2010 to $2.8 billion and included $2.3 billion in subsea systems. It was the second consecutive quarterly backlog increase and was mainly driven by $946 million in subsea systems orders. The Company's 2010 year-to-date subsea orders of $1.8 billion have already surpassed the total subsea orders received for all of 2009.
"Our strong order intake this quarter builds on our first quarter results and confirms the subsea market opportunities that we have been forecasting since late 2009," said Peter D. Kinnear, Chairman and Chief Executive Officer. "Although we face some market uncertainty due to the situation in the Gulf of Mexico, our strong first half results allow us to maintain our estimate for 2010 diluted earnings per share in a range of $2.70 to $2.90."
Energy Production Systems
Energy Production Systems' second quarter revenue was $822.9 million, including subsea systems revenue of $675 million. Energy Production Systems' operating profit of $129.6 million decreased from the prior-year quarter due to lower volume in both the subsea systems and surface wellhead businesses. The impact from the lower volume was partially offset by higher operating margin in subsea systems.
Energy Production Systems' inbound orders for the second quarter were $1.1 billion. This total was nearly double the inbound recorded in the second quarter of 2009 and included subsea systems orders of $946 million. Backlog for Energy Production Systems was $2.6 billion including $2.3 billion in subsea systems. Both orders and backlog increased for the second consecutive quarter.
Energy Processing Systems
Energy Processing Systems' second quarter revenue was $192.4 million, an 11 percent increase over the prior-year quarter. Energy Processing Systems' second quarter operating profit of $33.4 million was up 17 percent from the prior-year quarter. The increase was driven by higher volume and operating margin in the fluid control business, partially offset by operating profit declines in all other businesses within the segment.
Energy Processing Systems' inbound orders were $225.7 million for the second quarter, a 60 percent increase compared to the prior-year quarter. The increases in revenue, operating profit and orders were predominately driven by the fluid control business, which continued to benefit from the resurgence in North American pressure pumping activity. Backlog for the segment was $255.6 million at the end of the quarter.
Corporate Items
Corporate expense in the second quarter was $10.1 million, an increase of $1.0 million from the prior-year quarter. Other expense, net, was $9.9 million, an increase of $4.1 million from the prior-year quarter.
The Company ended the second quarter with net debt of $196.4 million. Net interest expense was $2.4 million in the quarter.
The Company repurchased 1.3 million shares of common stock in the quarter for $73.0 million and now has 3.2 million shares remaining in its stock repurchase authorization.
Depreciation and amortization for the second quarter was $23.7 million, down $4.9 million from the previous quarter, and capital expenditures totaled $19.3 million.
The Company recorded an effective tax rate of 31.5 percent for the second quarter.
Summary and Outlook
FMC Technologies reported second quarter revenue from continuing operations of $1.0 billion and diluted earnings per share from continuing operations of $0.78. Second quarter operating profit in Energy Production Systems decreased seven percent and in Energy Processing Systems increased 17 percent from the prior-year quarter.
Total Company backlog increased six percent from the first quarter of 2010 to $2.8 billion and included $2.3 billion in subsea systems. The backlog increase was mainly driven by $946 million in subsea systems orders, which brought the year-to-date total for subsea orders to $1.8 billion, surpassing the total for 2009.
The Company maintained guidance for 2010 diluted earnings per share from continuing operations in a range of $2.70 to $2.90.
FMC Technologies, Inc. (NYSE: FTI) is a leading global provider of technology solutions for the energy industry. Named by FORTUNE® Magazine as the World's Most Admired Oil and Gas Equipment, Service Company in 2010, the Company has approximately 10,800 employees and operates 25 production facilities in 15 countries. FMC Technologies designs, manufactures and services technologically sophisticated systems and products such as subsea production and processing systems, surface wellhead systems, high pressure fluid control equipment, measurement solutions, and marine loading systems for the oil and gas industry. For more information, visit www.fmctechnologies.com.
This release contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are information of a non-historical nature and are subject to risks and uncertainties that are beyond the Company's ability to control. These risks and uncertainties are described under the caption "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2009, and may be modified in subsequent quarterly reports filed by the Company with the Securities and Exchange Commission that may be accessed on the Company's website. The Company cautions shareholders and prospective investors that actual results may differ materially from those indicated by the forward-looking statements.
FMC Technologies, Inc. will conduct its second quarter 2010 conference call at 9:00 a.m. EDT on Monday, July 26, 2010. The event will be available at www.fmctechnologies.com. An archived audio replay will also be available after the event at the same website address. In the event of a disruption of service or technical difficulty during the call, information will be posted at www.fmctechnologies.com/earnings.
FMC TECHNOLOGIES, INC. AND CONSOLIDATED SUBSIDIARIES
----------------------------------------------------
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
-------------------------------------------
(Unaudited and in millions, except per share amounts)
Three Months
Ended Six Months Ended
June 30 June 30
------- -------
2010 2009 2010 2009
---- ---- ---- ----
Revenue $1,012.5 $1,103.8 $2,062.8 $2,156.8
Costs and expenses 866.0 958.7 1,759.4 1,904.3
----- ----- ------- -------
146.5 145.1 303.4 252.5
Other income
(expense), net (2.9) 9.4 (8.2) 3.3
---- --- ---- ---
Income before net
interest expense and
income taxes 143.6 154.5 295.2 255.8
Net interest expense (2.4) (2.3) (4.7) (4.4)
---- ---- ---- ----
Income from
continuing
operations before
income taxes 141.2 152.2 290.5 251.4
Provision for income
taxes 44.4 45.5 94.3 73.2
---- ---- ---- ----
Income from
continuing
operations 96.8 106.7 196.2 178.2
Income (loss) from
discontinued
operations, net of
income taxes - 0.1 - (0.2)
--- --- --- ----
Net Income 96.8 106.8 196.2 178.0
Less: net income
attributable to
noncontrolling
interests (0.6) (0.8) (1.0) (1.0)
---- ---- ---- ----
Net income
attributable to FMC
Technologies, Inc. $96.2 $106.0 $195.2 $177.0
===== ====== ====== ======
Basic Earnings per
share attributable
to FMC Technologies,
Inc.:
Income from
continuing
operations $0.79 $0.86 $1.60 $1.42
Income (loss) from
discontinued
operations - - - -
--- --- --- ---
Basic earnings per
share $0.79 $0.86 $1.60 $1.42
===== ===== ===== =====
Basic weighted
average shares
outstanding 122.0 123.8 122.3 124.9
===== ===== ===== =====
Diluted earnings per
share attributable
to FMC Technologies,
Inc.:
Income from
continuing
operations $0.78 $0.84 $1.58 $1.40
Income (loss) from
discontinued
operations - - - -
--- --- --- ---
Diluted earnings per
share $0.78 $0.84 $1.58 $1.40
===== ===== ===== =====
Diluted weighted
average shares
outstanding 123.2 125.5 123.5 126.6
===== ===== ===== =====
Net income
attributable to FMC
Technologies, Inc.:
Income from
continuing
operations $96.2 $105.9 $195.2 $177.2
Income (loss) from
discontinued
operations - 0.1 - (0.2)
Net income
attributable to FMC
Technologies, Inc. $96.2 $106.0 $195.2 $177.0
===== ====== ====== ======
FMC TECHNOLOGIES, INC. AND CONSOLIDATED SUBSIDIARIES
----------------------------------------------------
BUSINESS SEGMENT DATA
---------------------
(Unaudited and in millions)
Three Months
Ended Six Months Ended
June 30 June 30
------- -------
2010 2009 2010 2009
---- ---- ---- ----
Revenue
-------
Energy Production
Systems $822.9 $933.9 $1,710.5 $1,806.2
Energy Processing
Systems 192.4 174.1 359.9 355.1
Other revenue (1) and
intercompany
eliminations (2.8) (4.2) (7.6) (4.5)
---- ---- ---- ----
$1,012.5 $1,103.8 $2,062.8 $2,156.8
======== ======== ======== ========
Income before income
taxes
--------------------
Segment operating
profit
-----------------
Energy Production
Systems $129.6 $140.1 $287.2 $244.5
Energy Processing
Systems 33.4 28.5 56.8 57.0
---- ---- ---- ----
Total segment
operating profit 163.0 168.6 344.0 301.5
Corporate items
---------------
Corporate expense (10.1) (9.1) (19.1) (15.9)
Other revenue and
other expense, net
(1) (9.9) (5.8) (30.7) (30.8)
Net interest expense (2.4) (2.3) (4.7) (4.4)
---- ---- ---- ----
Total corporate items (22.4) (17.2) (54.5) (51.1)
----- ----- ----- -----
Income from
continuing
operations before
income taxes
attributable to FMC
Technologies, Inc. $140.6 $151.4 $289.5 $250.4
====== ====== ====== ======
(1) Other revenue comprises certain unrealized gains and losses on
derivative instruments related to unexecuted sales contracts. Other
expense, net, generally includes stock-based compensation, other
employee benefits, LIFO adjustments, certain foreign exchange gains
and losses, and the impact of unusual or strategic transactions not
representative of segment operations.
FMC TECHNOLOGIES, INC. AND CONSOLIDATED SUBSIDIARIES
----------------------------------------------------
BUSINESS SEGMENT DATA
---------------------
(Unaudited and in millions)
Three Months Ended Six Months Ended
June 30 June 30
------- -------
2010 2009 (1) 2010 2009 (1)
---- ------- ---- -------
Inbound Orders
--------------
Energy
Production
Systems $1,068.5 $538.5 $2,117.3 $1,100.4
Energy
Processing
Systems 225.7 141.4 406.0 292.4
----- ----- ----- -----
Subtotal
Energy
Systems 1,294.2 679.9 2,523.3 1,392.8
Intercompany
eliminations (1.9) (1.9) (4.4) (3.8)
---- ---- ---- ----
Total inbound
orders $1,292.3 $678.0 $2,518.9 $1,389.0
======== ====== ======== ========
June 30
-------
2010 2009
---- ----
Order Backlog
-------------
Energy
Production
Systems $2,595.5 $2,822.1
Energy
Processing
Systems 255.6 252.0
----- -----
Subtotal
Energy
Systems 2,851.1 3,074.1
Intercompany
eliminations (5.1) (4.6)
---- ----
Total order
backlog $2,846.0 $3,069.5
======== ========
(1) Inbound orders for 2009 have been revised to exclude the effects
of foreign currency translation on
backlog. Prior to 2010, the Company's practice was to include
backlog translation effects as a component
of inbound orders.
FMC TECHNOLOGIES, INC. AND CONSOLIDATED SUBSIDIARIES
----------------------------------------------------
CONDENSED CONSOLIDATED BALANCE SHEETS
-------------------------------------
(In millions)
December
June 30, 31,
2010 2009
(Unaudited)
-----------
Cash and cash equivalents $403.8 $460.7
Trade receivables, net 924.8 879.2
Inventories 525.9 591.8
Other current assets 252.1 293.9
Total current assets 2,106.6 2,225.6
Property, plant and equipment, net 548.5 581.9
Goodwill 262.3 272.7
Intangible assets, net 141.1 154.6
Investments 142.7 141.8
Other assets 138.6 132.9
Total assets $3,339.8 $3,509.5
======== ========
Short-term debt and current portion
of long-term debt $14.7 $28.5
Accounts payable, trade 276.5 343.9
Advance payments and progress billings 450.5 670.4
Other current liabilities 518.5 635.7
Total current liabilities 1,260.2 1,678.5
Long-term debt, less current portion 585.5 391.6
Other liabilities 362.6 327.6
FMC Technologies, Inc. stockholders'
equity 1,121.4 1,102.8
Noncontrolling interest in
consolidated companies 10.1 9.0
Total liabilities and equity $3,339.8 $3,509.5
======== ========
FMC TECHNOLOGIES, INC. AND CONSOLIDATED SUBSIDIARIES
----------------------------------------------------
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
-----------------------------------------------
(Unaudited and in millions)
Six Months
Ended
June 30
-------
2010 2009
---- ----
Cash provided (required) by operating
activities of continuing operations:
Income from continuing operations $195.2 $177.2
Depreciation and amortization 52.3 40.1
Trade accounts receivable, net (92.9) 75.0
Inventories 38.3 (53.0)
Accounts payable, trade (50.8) (91.0)
Advance payments and progress billings (186.1) (79.1)
Other (20.1) 134.5
Net cash (required) provided by operating
activities of continuing operations (64.1) 203.7
Cash provided (required) by operating
activities of discontinued operations - (1.0)
Cash provided (required) by investing
activities:
Capital expenditures (38.7) (54.9)
Proceeds from disposal of assets 1.9 18.2
Net cash required by investing activities (36.8) (36.7)
Cash provided (required) by financing
activities:
Net issuance (repayment) of debt 181.8 (165.1)
Issuance of capital stock 1.4 0.2
Purchase of stock held in treasury (123.5) (95.7)
Other financing (13.3) (4.7)
Net cash provided (required) by financing
activities 46.4 (265.3)
Effect of changes in foreign exchange rates on
cash and cash equivalents (2.4) 15.4
---- ----
Decrease in cash and cash equivalents (56.9) (83.9)
Cash and cash equivalents, beginning of period 460.7 340.1
----- -----
Cash and cash equivalents, end of period $403.8 $256.2
====== ======
SOURCE FMC Technologies, Inc.
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