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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, President and CEO. John T. Gremp Good morning. Welcome to our first quarter 2012 conference call. With me today are Maryann Seaman, our CFO; and Bob Potter, our Executive Vice President. I'll start with some highlights from the quarter. Maryann will provide specifics on our financial performance, and then we'll open up the call for your questions. We're pleased by the continued strength in both our Subsea and Surface Technologies markets. The subsea market opportunities continue to grow and our recent Petrobras pre-salt award positions us to exceed our 2011 subsea inbound total. Slowing expansion of capital assets related to the North America pressure pumping market present some challenges. But the field activity in both North America and internationally continues to expand. Regarding the results for the quarter. Earnings were $0.41 per diluted share, a 17% increase over our prior year quarter. Total company quarterly revenue was $1.4 billion and operating profit was $162 million. Subsea Technologies inbounded $1.4 billion of awards in the quarter and our backlog now stands at a record $4.7 billion. Revenue for the quarter in Subsea Technologies was $895 million, an increase of 30% over the prior year quarter, but as anticipated, a 7% decrease sequentially. For the year, we still expect to generate approximately $4 billion in subsea revenue. Subsea margins for the quarter were below our expectations at 8.4%, primarily reflecting additional cost related to CLOV project in West Africa. Our Eastern region project execution issues identified in the previous quarter are now largely behind us. With our continued expectation significant subsea market growth, we added almost 500 employees to our subsea workforce in the first quarter. We recognized that headcount additions are challenging our near-term margin performance. But we remain convinced that the investments and resources are necessary to support the anticipated market growth.
Surface Technologies first quarter revenue of $378 million was up 30% from the prior year quarter and in line with the fourth quarter. North America shale activity remains strong for both fluid control and surface wellhead. However, as the frac lead capacity comes more in line with current demand, we think some spending on further horsepower additions will be reduced. As long as the North American rig count remains relatively stable, we think the field portion of our fluid control business should remain strong. Execution has improved for surface wellhead as we've recovered from the challenges we faced internationally last year. Going forward, we remain confident in the outlook for global surface markets.Returning to the subsea business. In the first quarter, we inbounded 85 subsea trees and this represents 48% of the industry tree awards. Our Petrobras subsea award of 78 pre-salt trees, including controls, confirms the expanding market opportunities in Brazil and represents the largest Brazilian subsea award to date. There were 3 large subsea awards announced for the industry during the quarter and the list of projects we're tracking remains very strong. If many of these projects are awarded as we expect, we should see an improvement in the pricing environment. Looking forward, in 2012, we expect to generate approximately $4 billion in revenue in our Subsea Technologies segment with margins improving in the coming quarters and inbound awards exceeding the numbers we recorded in 2011. We also expect our surface wellhead business to continue its strong performance globally. And in fluid control, our field replacement and repair business should remain strong while we anticipate slowing orders related to decreased horsepower expansion in the North America pressure pumping market. We're maintaining our full year guidance in the range of $2.10 to $2.25. Read the rest of this transcript for free on seekingalpha.com