FMC Technologies, Inc. today 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.
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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.
FMC Technologies, Inc. is a leading global provider of technology solutions for the energy industry. The Company 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. Named by FORTUNE Magazine as America's Most Admired Oil and Gas Equipment, Service Company in 2008, FMC Technologies has approximately 10,400 employees and operates 19 manufacturing facilities in 14 countries. For more information, visit http://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, 2008 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 2009 conference call at 9:00 a.m. EDT on Wednesday, July 29, 2009. The event will be available at http://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 http://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 Six Months Ended Ended June 30 June 30 ------- ------- 2009 2008 2009 2008 ---- ---- ---- ---- Revenue $1,103.8 $1,178.1 $2,156.8 $2,218.2 Costs and expenses 958.7 1,040.0 1,904.3 1,972.8 ----- ------- ------- ------- 145.1 138.1 252.5 245.4 Other income (expense), net 9.4 0.5 3.3 (5.3) ----- ----- ----- ----- Income before net interest expense and income taxes 154.5 138.6 255.8 240.1 Net interest income (expense) (2.3) 0.1 (4.4) 0.1 ----- ----- ----- ----- Income from continuing operations before income taxes 152.2 138.7 251.4 240.2 Provision for income taxes 45.5 40.0 73.2 72.6 ---- ---- ---- ---- Income from continuing operations 106.7 98.7 178.2 167.6 Income (loss) from discontinued operations, net of income taxes 0.1 7.6 (0.2) 20.7 --- --- ---- ---- Net Income 106.8 106.3 178.0 188.3 Less: net income attributable to noncontrolling interests (0.8) (0.5) (1.0) (1.0) Net income attributable to FMC Technologies, Inc. $106.0 $105.8 $177.0 $187.3 ====== ====== ====== ====== Basic Earnings per share attributable to FMC Technologies, Inc.: Income from continuing operations $0.86 $0.77 $1.42 $1.29 Income (loss) from discontinued operations - 0.05 - 0.16 --- ---- --- ---- Basic earnings per share $0.86 $0.82 $1.42 $1.45 ===== ===== ===== ===== Basic weighted average shares outstanding 123.8 128.4 124.9 129.3 ===== ===== ===== ===== Diluted earnings per share attributable to FMC Technologies, Inc.: Income from continuing operations $0.84 $0.75 $1.40 $1.27 Income (loss) from discontinued operations - 0.06 - 0.16 --- ---- --- ---- Diluted earnings per share $0.84 $0.81 $1.40 $1.43 ===== ===== ===== ===== Diluted weighted average shares outstanding 125.5 130.4 126.6 131.2 ===== ===== ===== ===== Net income attributable to FMC Technologies, Inc.: Income from continuing operations $105.9 $98.2 177.2 $166.6 Income (loss) from discontinued operations 0.1 7.6 (0.2) 20.7 --- --- ---- ---- Net income attributable to FMC Technologies, Inc. $106.0 $105.8 177.0 $187.3 ====== ====== ===== ====== FMC TECHNOLOGIES, INC. AND CONSOLIDATED SUBSIDIARIES ---------------------------------------------------- BUSINESS SEGMENT DATA --------------------- (Unaudited and in millions) Three Months Six Months Ended Ended June 30 June 30 ------- ------- 2009 2008 2009 2008 ---- ---- ---- ---- Revenue ------- Energy Production Systems $933.9 $947.7 $1,806.2 $1,801.7 Energy Processing Systems 174.1 220.8 355.1 424.6 Other revenue (1) and intercompany eliminations (4.2) 9.6 (4.5) (8.1) ---- --- ---- ---- $1,103.8 $1,178.1 $2,156.8 $2,218.2 ======== ======== ======== ======== Income before income taxes -------------------------- Segment operating profit ------------------------ Energy Production Systems $140.1 $104.9 $244.5 $200.0 Energy Processing Systems 28.5 42.9 57.0 82.1 ---- ---- ---- ---- Total segment operating profit 168.6 147.8 301.5 282.1 Corporate items --------------- Corporate expense (9.1) (9.9) (15.9) (18.8) Other revenue and other expense, net (1) (5.8) 0.2 (30.8) (24.2) Net interest expense (2.3) 0.1 (4.4) 0.1 ---- --- ---- --- Total corporate items (17.2) (9.6) (51.1) (42.9) ----- ---- ----- ----- Income from continuing operations before income taxes attributable to FMC Technologies, Inc. $151.4 $138.2 $250.4 $239.2 ====== ====== ====== ====== (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 ------- ------- 2009 2008 2009 2008 ---- ---- ---- ---- Inbound Orders -------------- Energy Production Systems $669.0 $987.3 $1,283.3 $1,900.4 Energy Processing Systems 147.5 203.5 294.0 461.3 ----- ----- ----- ----- Subtotal Energy Systems 816.5 1,190.8 1,577.3 2,361.7 Intercompany eliminations (2.2) 9.5 (2.9) (7.9) ---- --- ---- ---- Total inbound orders $814.3 $1,200.3 $1,574.4 $2,353.8 ====== ======== ======== ======== June 30 ------- 2009 2008 ---- ---- Order Backlog ------------- Energy Production Systems $2,822.1 $4,261.2 Energy Processing Systems 252.0 367.2 ----- ----- Subtotal Energy Systems 3,074.1 4,628.4 Intercompany eliminations (4.6) (2.2) ---- ---- Total order backlog $3,069.5 $4,626.2 ======== ======== FMC TECHNOLOGIES, INC. AND CONSOLIDATED SUBSIDIARIES ---------------------------------------------------- CONDENSED CONSOLIDATED BALANCE SHEETS ------------------------------------- (In millions) June 30, December 31, 2009 2008 (Unaudited) ----------- Cash and cash equivalents $256.2 $340.1 Trade receivables, net 963.4 996.1 Inventories 630.0 559.3 Other current assets 286.0 542.8 ----- ----- Total current assets 2,135.6 2,438.3 Property, plant and equipment, net 544.8 494.9 Goodwill 139.0 128.7 Intangible assets, net 67.0 70.2 Investments 139.7 151.2 Other assets 177.0 297.6 ----- ----- Total assets $3,203.1 $3,580.9 ======== ======== Short-term debt and current portion of long-term debt $25.0 $23.0 Accounts payable, trade 372.6 439.8 Advance payments and progress billings 727.6 770.3 Other current liabilities 546.1 726.7 Liabilities of discontinued operations 2.7 3.5 --- --- Total current liabilities 1,674.0 1,963.3 Long-term debt, less current portion 305.6 472.0 Other liabilities 312.7 446.9 Common stock 1.4 1.4 Other FMC Technologies, Inc. stockholders' equity 900.1 689.0 Noncontrolling interest in consolidated companies 9.3 8.3 --- --- Total liabilities and equity $3,203.1 $3,580.9 ======== ======== FMC TECHNOLOGIES, INC. AND CONSOLIDATED SUBSIDIARIES ---------------------------------------------------- CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS ----------------------------------------------- (Unaudited and in millions) Six Months Ended June 30 ------- 2009 2008 ---- ---- Cash provided (required) by operating activities of continuing operations: Income from continuing operations $177.2 $166.6 Depreciation and amortization 40.1 33.3 Trade accounts receivable, net 75.0 (17.1) Inventories (53.0) (76.3) Accounts payable, trade (91.0) 38.0 Advance payments and progress billings (79.1) 35.1 Other 134.5 (12.8) ----- ----- Net cash provided by operating activities of continuing operations 203.7 166.8 ----- ----- Cash provided (required) by operating activities of discontinued operations (1.0) 29.4 ---- ---- Cash provided (required) by investing activities of continuing operations: Capital expenditures (54.9) (78.4) Proceeds on disposal of assets 18.2 1.0 ---- --- Net cash required by investing activities of continuing operations (36.7) (77.4) ----- ----- Cash required by investing activities of discontinued operations - (10.8) --- ----- Cash provided (required) by financing activities: Net issuance (repayment) of debt (165.1) 196.3 Issuance of capital stock 0.2 4.5 Purchase of stock held in treasury (95.7) (169.8) Other financing (4.7) 4.6 ---- --- Net cash provided (required) by financing activities (265.3) 35.6 ------ ---- Effect of changes in foreign exchange rates on cash and cash equivalents 15.4 5.1 ---- --- Increase (decrease) in cash and cash equivalents (83.9) 148.7 Cash and cash equivalents, beginning of period 340.1 129.5 ----- ----- Cash and cash equivalents, end of period $256.2 $278.2 ====== ======
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