Oil drilling equipment maker FMC Technologies Inc. (FTI) reported significantly better-than-expected first quarter 2010 results, helped by robust performance from its subsea oil and gas processing systems, as well as cost cutting initiatives. Earnings per share from continuing operations came in at 80 cents, comfortably beating the Zacks Consensus Estimate of 64 cents and the year-ago profit of 56 cents.
 
Revenue of $1,050.3 million was almost unchanged from $1,053.0 million achieved during the first quarter of 2009 and marginally missed the Zacks Consensus Estimate of $1,058 million, as sales declined in the company’s Energy Processing Systems segment.
 
FMC’s outperformance now shifts the focus on Cameron International Corp. (CAM), another leading maker of subsea systems. Cameron is scheduled to report earnings before the opening bell today.
 
Energy Production Systems
 
The segment revenue for the most recent quarter was $887.6 million, an increase of 1.8% from the first quarter of 2009, driven by a 2% rise in sales of subsea systems. Operating profit came in at $157.6 million, up 51.0% year-over-year. The positive comparison was achieved on the back of good progress on higher margin subsea projects, as well as lower costs. 
 
Energy Processing Systems
 
Energy Processing Systems revenues were down 7.5% year-over-year to $167.5 million. The main reasons for the underperformance can be attributed to the sales decline in both the material handling systems and loading systems businesses, partially offset by improvement in the fluid control business. Segment operating profit, at $23.4 million, declined 17.9% from the year-ago period, reflecting lower sales in all businesses except fluid control.
 
Backlog
 
As of Mar 31, 2010, FMC’s total backlog was $2,679.8 million, compared to $2,553.7 million at Dec 31, 2009. Of this, backlog for Energy Production Systems was $2,450.7 million (including $2,100 million in subsea backlog), while Energy Processing Systems’ backlog finished the quarter at $229.1 million.
 
Capex, Share Repurchases, & Balance Sheet
 
During the quarter, FMC spent $19.4 million on capital programs, while it repurchased 874,000 shares at a cost of $50.5 million. As of Mar 31, 2010, the company had cash and cash equivalents of $369 million and long-term debt (including current portion) of $472.8 million.
 
Guidance
 
Management guided towards 2010 earnings per share in the $2.70 – $2.90 range, up from the previous forecast of $2.45 – $2.65.
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