FMC Technologies, Inc. (NYSE:FTI Not-Tra) Q2 2016 Earnings Conference Call - Preliminary Transcript

Jul 21, 2016 • 09:00 am ET

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FMC Technologies, Inc. (NYSE:FTI Not-Tra) Q2 2016 Earnings Conference Call - Preliminary Transcript

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Presentation
Operator
Operator

Good morning. My name is Emily, and I will be your conference operator today. At this time, I would like to welcome everyone to the FMC Technologies' Second Quarter Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions] Thank you.

Matt Seinsheimer, you may begin your conference.

Executive
Matthew Seinsheimer

Good morning, and welcome to FMC Technologies' second quarter 2016 earnings conference call. Our news release and financial statements issued yesterday can be found on our website. I'd like to caution you with respect to any forward-looking statements made during this call. Although these forward-looking statements are based on our current expectations, beliefs and assumptions regarding future developments and business conditions, they are subject to certain risks and uncertainties that could cause actual results to differ materially from those expressed in or implied by these statements.

Known material factors that could cause our actual results to differ from our projected results are described in our 10-K, 10-Q and other filings with the SEC. We wish to caution you not to place undue reliance on any forward-looking statements, which speak only as of the date hereof. We undertake no obligation to publicly update or revise any of our forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise.

I will now turn the call over to John Gremp, FMC Technologies' Chairman and CEO.

Executive
John Gremp

Good morning. Welcome to our second quarter 2016 earnings conference call. With me today are Maryann Mannen, our Chief Financial Officer and Doug Pferdehirt, our President and Chief Operating Officer. I'll begin my remarks today with highlights from the quarter and then provide comments on the industry and outlook for our markets. I'll also speak to our strategy for dealing with the downturn and how we are better positioned for market recovery including comments on our pending merger with Technip.

Doug will then speak to the status of the Technip merger and more importantly, he will share our customers' reactions to the merger before providing an update on our Subsea business. Maryann will follow with specifics on our financial performance and an update to our financial outlook for 2016 and then we'll open up the call for questions.

Operating results in the quarter reflect both market conditions and our actions to address the cyclical downturn as the continued weakness experienced in our surface business was partially offset by another strong quarter in our subsea business. Subsea orders in the quarter were limited to subsea services inbound and small equipment orders as we continue to see the impact of reduced capital spending. While orders were soft, our subsea technologies segment delivered margins of 14.1% when excluding charges. These solid results reflect our continued focus on execution as well as the realization of additional restructuring savings. We've increased confidence in our ability to deliver strong performance for the year.

Surface technologies reported a loss in the quarter