FMC Technologies Reports First Quarter 2008 Diluted Earnings per Share from Continuing Operations of $0.62, up 38 Percent
Houston, Texas, April 28, 2008
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Highlights:
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Energy Systems’ backlog at a record of $4.6 billion
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Energy Systems’ revenue up 35 percent with subsea sales up 47 percent
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Energy Production Systems’ operating profit up 53 percent
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Company increases guidance for 2008 full-year diluted earnings per share from continuing operations from a range of $2.75-$2.85 to a range of $2.80-$2.90
HOUSTON, April 28, 2008 – FMC Technologies, Inc. (NYSE:FTI) today reported first quarter 2008 revenue of $1.3 billion, up 32 percent over the first quarter of 2007 with the growth coming from each of its four reporting segments. Diluted earnings per share from continuing operations was $0.62, up 38 percent from $0.45 per diluted share in the prior-year quarter.
The diluted earnings per share of $0.62 for the first quarter included a $0.01 per share charge associated with the intended spin-off of the FoodTech and Airport Systems businesses and a $0.06 per share charge associated with non-cash mark-to-market charges for foreign currency contracts.
In the first quarter, inbound orders for the company totaled $1.4 billion, of which $1.2 billion was in Energy Systems. Backlog reached a record $5.0 billion, including a record $4.6 billion in Energy Systems.
Operating profit in Energy Systems was strong, up 53 percent in Energy Production Systems and up 30 percent in Energy Processing Systems from the first quarter of 2007.
“We are very pleased with our results from the first quarter,” said Peter D. Kinnear, President and Chief Executive Officer. “We increased our Energy Systems backlog to a record $4.6 billion, while improving operating margins in both Energy Systems segments. We are increasing our full-year estimate of 2008 diluted earnings per share to a range of $2.80 to $2.90 including FoodTech and Airport Systems, but excluding costs associated with the planned spin-off.”
Energy Production Systems
Energy Production Systems’ first quarter revenue of $854.0 million increased 40 percent over the prior-year quarter due mainly to increased subsea systems sales. Revenue for subsea systems was a record $699 million for the quarter, up 47 percent from the prior-year quarter. Surface wellhead revenue also increased from the prior-year quarter.
Energy Production Systems’ operating profit of $95.0 million increased 53 percent over the prior-year quarter. The increase was mainly due to the higher volume and operating margin in subsea systems. Operating margin in the segment reached 11.1 percent in the quarter.
Energy Production Systems’ inbound orders were $913.1 million for the first quarter including $694 million in subsea systems. Backlog of $4.2 billion was up 84 percent from the prior-year quarter and included $3.9 billion in subsea backlog.
Energy Processing Systems
Energy Processing Systems’ first quarter revenue of $203.9 million was 18 percent higher than the prior-year quarter. Each business in the segment recorded revenue improvements over the prior-year quarter mostly on higher volume of oil and gas infrastructure products.
Energy Processing Systems’ first quarter operating profit of $39.2 million was 30 percent higher than the prior-year quarter. The improvement was the result of higher volume and higher overall operating margins.
Energy Processing Systems’ inbound orders were $257.8 million for the first quarter, up 29 percent from the prior-year quarter. The increase was primarily driven by a large order in the material handling systems business related to a new coal-fired power generation project. Backlog was $384.5 million, up 16 percent from the prior-year quarter.
FoodTech
FoodTech’s revenue of $147.2 million in the first quarter was up 21 percent from the prior-year quarter. Operating profit of $13.1 million was up 35 percent from the prior-year quarter due to the higher volume.
Inbound orders totaled $148.9 million in the quarter. Backlog was $166.0 million, down 10 percent from the prior-year quarter.
Airport Systems
Airport Systems’ first quarter revenue of $107.6 million was up 48 percent compared to the first quarter of 2007 due to higher volume of ground support equipment. Airport Systems’ first quarter operating profit of $7.6 million was up 145 percent from the prior-year quarter due to the higher volume.
Inbound orders totaled $86.7 million in the quarter. Backlog was $205.9 million, up 18 percent from the prior-year quarter.
Corporate Items
Corporate expense in the first quarter of 2008 was $8.9 million, $1.0 million above the prior-year quarter.
Other expense, net, of $26.2 million increased $22.7 million from the first quarter of 2007. The company incurred $2.7 million in expenses in the quarter associated with its efforts to spin-off its FoodTech and Airport Systems businesses. The company intends to file a Form 10 with the SEC in the second quarter and expects the spin-off to occur in mid-2008. During the quarter, the company also incurred a non-cash, mark-to-market loss on foreign currency forward contracts of $13.5 million compared to a gain in the prior-year quarter of $4.0 million. It is expected that the foreign currency forward contracts will be held to maturity and that the loss will reverse over the term of the contracts.
The company ended the quarter in a net cash position due in part to lower working capital. Consequently, net interest expense in the first quarter of 2008 was down $1.9 million from the prior-year quarter.
In the quarter, the company repurchased 1.6 million shares of common stock for $88.8 million.
Depreciation and amortization for the first quarter of 2008 was $21.7 million, up from $19.4 million in the prior-year quarter.
Capital expenditures during the first quarter of 2008 totaled $47.1 million, up from $29.8 million in the prior-year quarter due mainly to investment in subsea intervention assets.
The company recorded an income tax rate of 32.2 percent for continuing operations in the first quarter.
Summary and Outlook
FMC Technologies reported diluted earnings per share from continuing operations of $0.62, up 38 percent from the prior-year quarter. This result included charges per share of $0.01 associated with FoodTech and Airport Systems spin-off costs and $0.06 associated with non-cash mark-to-market charges for foreign currency contracts.
Energy Production Systems’ and Energy Processing Systems’ operating profits were up 53 percent and 30 percent respectively over the first quarter of 2007. Total company backlog reached a record $5.0 billion, including a record $4.6 billion in Energy Systems.
The company increased its estimate for its full year 2008 diluted earnings per share from continuing operations from a range of $2.75-$2.85 to a range of $2.80-$2.90 including FoodTech and Airport Systems, but excluding costs associated with the planned spin-off.
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FMC Technologies, Inc. is a leading global provider of technology solutions for the energy industry and other industrial markets. 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. The Company also produces food processing equipment for the food industry and specialized equipment to service the aviation industry. Twice named as the Most Admired Oil and Gas, Equipment Service Company by FORTUNE magazine, FMC Technologies employs approximately 13,000 people and operates 33 manufacturing facilities in 19 countries. 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. Forward-looking statements are qualified in their entirety by the cautionary language set forth in the Cautionary Note Regarding Forward-Looking Statements in Management's Discussion and Analysis of Financial Condition and Results of Operations in the Company's Annual Report on Form 10-K for the year ended December 31, 2006. The Company cautions shareholders and prospective investors that actual results may differ materially from those indicated by the forward-looking statements.