FMC Technologies reports first quarter results

FMC Technologies, Inc. reported first quarter 2015 revenue of US$1.7 billion, down 7% from the prior year quarter as stronger Subsea Technologies performance was offset by the continued strength of the US dollar and the decline in the North American land market. Diluted earnings per share were US$0.63.

Total inbound orders were US$969.0 million and included US$552.0 million in Subsea Technologies orders. Backlog for the company was US$5.5 billion, including Subsea Technologies backlog of US$4.8 billion.

"We delivered solid first quarter earnings, largely the result of the continued strength of our Subsea Technologies performance," said John Gremp, Chairman, President, and CEO of FMC Technologies. "We are leveraging our backlog and execution momentum, while taking actions in all of our businesses to strengthen our operating structure. With our strong customer relationships, we expect to inbound at least US$3 billion of subsea awards in 2015."

Subsea Technologies

Subsea Technologies first quarter revenue was US$1.2 billion, down 4% from the prior year quarter due to the strength of the US dollar.

Subsea Technologies operating profit increased 19% from the prior year quarter to US$168.7 million, primarily due to improved execution and stronger project margins related to backlog conversion.

Subsea Technologies inbound orders for the first quarter were US$552.0 million and backlog was US$4.8 billion.

Surface Technologies

Surface Technologies first quarter revenue was US$446.3 million, down 7% from the prior year quarter as increased activity in the company’s non-North American surface wellhead business was more than offset by decreases in the North American market.

Surface Technologies operating profit decreased 28% from the prior year quarter to US$62.9 million driven by the North American activity declines.

Surface Technologies inbound orders for the first quarter were US$326.3 million and backlog was US$519.5 million.

Energy Infrastructure

Energy Infrastructure first quarter revenue was US$100.9 million, down 31% from the prior year quarter due to the absence of the Material Handling Products business which was sold in the second quarter of 2014 and reduced sales in all businesses within the segment.

Energy Infrastructure operating profit decreased 81% from the prior year quarter to US$2.9 million, primarily as a result of both reduced and delayed revenue. Energy Infrastructure inbound orders for the first quarter were US$95.8 million and backlog was US$173.1 million.

Corporate items

Corporate expense in the first quarter was US$16.3 million, an increase of US$1.4 million from the prior year quarter. Other revenue and other expense, net, increased US$6.7 million from the prior year quarter to US$26.4 million, due largely to foreign currency losses related to the strength of the US dollar.

The company ended the quarter with net debt of US$621.3 million. Net interest expense was US$7.3 million in the quarter. The company repurchased approximately 776 000 shares of common stock at an average cost of US$39.75 per share in the quarter.

Depreciation and amortisation for the first quarter was US$57.8 million, down US$1.3 million from the sequential quarter. Capital expenditures for the first quarter were US$86.7 million. The company recorded an effective tax rate of 20.0% for the first quarter largely due to less income subject to US taxation rules.

Summary and outlook

FMC Technologies reported first quarter diluted earnings per share of US$0.63. Total inbound orders of US$969.0 million in the first quarter included US$552.0 million in Subsea Technologies orders. The company's backlog stands at US$5.5 billion, including Subsea Technologies backlog of US$4.8 billion. The company expects to inbound at least US$3 billion of Subsea Technologies awards in 2015.

Adapted from press release by Rosalie Starling

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