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The energy sector has gotten hit hard over the past year and a half, but many companies have started to find ways to pull out of the worst of their woes. The rise in oil prices toward $50 per barrel hasn't come close to reversing all the damage in the oil patch, but drilling services providers like FMC Technologies (FTI 0.08%) have hoped that higher prices would spur greater activity among customers. Coming into Wednesday's second-quarter financial report, FMC investors expected further declines from year-ago levels in its overall results, but as we've seen in past quarter, FMC wasn't able to meet even those low expectations. Let's look more closely at FMC Technologies to see why it couldn't post better results this time around.

FMC Technologies can't bounce back

FMC Technologies' second-quarter financial report was disappointing for those who had hoped for a minor rebound from the company. Revenue fell by 32% to $1.15 billion, and that was more than $100 million worse than the consensus forecast among those following the stock. Adjusted net income plunged 57% to $49 million, and the resulting adjusted earnings of $0.22 per share were $0.08 less than investors had wanted to see.

There weren't any true signs of improvement among FMC's major segments. Sales dropped 31% in the subsea technologies division, with only a couple of percentage points stemming from foreign currency impacts. Total operating profit fell by a third because of lower activity levels, and inbound order activity of $334 million eased downward sequentially from the first quarter and was down by two-thirds from year-ago levels. Backlogs were down roughly $500 million to $2.9 billion.

The surface technologies segment fared even worse. Sales plunged by two-fifths, and the company pointed to the fact that rig counts in North America got slashed by more than half. The unit posted an operating loss of $17.2 million even after accounting for one-time charges, and inbound orders got cut in half to $143.1 million, leaving $357 million in backlog primarily outside North America.

The energy infrastructure division held up the best during the quarter, suffering a revenue loss of only 16%. Operating profits of $7.8 million reversed a loss during the first quarter, but inbound orders of $62.1 million were down more than 40% from year-ago levels, and backlogs of $133.2 million were down significantly from where they were at the end of March.

What's next?

CEO John Gremp tried to cast the results in as positive a light as possible. "Subsea technologies delivered solid operating margins as we continue to benefit from our execution momentum as well as the savings from our ongoing restructuring activities," Gremp said, but he noted that "the further deterioration in North America led to a significant impact to our surface technologies earnings."

Even under tough conditions, FMC Technologies kept trying to take advantage of what it perceives as a bargain opportunity for its stock. FMC spent more than $22 million repurchasing its stock during the quarter, buying back more than 780,000 shares at $28.45 per share on average.

However, going forward, FMC has agreed to stop buying back shares because of its proposed merger with French engineering and construction company Technip in an all-stock deal. The combined entity will be owned roughly 50/50 between Technip and FMC shareholders, and FMC believes that the deal will produce $400 million in cost-related synergies by 2019. With the deal not expected to close until early 2017, investors will have to look closely to make sure that it gets the required approvals to move forward.

FMC Technologies didn't see its shares move in after-hours trading following the announcement, but it's entirely possible that the stock could remain under pressure Thursday. Until FMC sees some fundamental benefits from rising energy prices, the share price won't give investors the returns they want even if the overall oil and gas picture improves.