Investors have had to deal with extremely volatile conditions in the energy industry, and drilling-services provider FMC Technologies (NYSE:FTI) has continued to get hit hard even as some news in the oil and natural gas arena has started to improve. Even though the company has completed its merger to create TechnipFMC, FMC nevertheless reported its fourth-quarter financial results on a pro forma basis as an independent company. Coming into the Friday release of the fourth-quarter report, FMC investors weren't kidding themselves about how bad the quarter would be from a top-line perspective, but the results weren't even able to live up to those somewhat low expectations.

Let's look more closely at FMC Technologies to see how it did and what's ahead for the drilling specialist in 2017 and beyond.

Undersea monitoring systems for oil and gas applications.

Image source: FMC Technologies.

Recovering energy prices aren't helping FMC yet

FMC Technologies' fourth-quarter financial report showed little relief for the company. Sales plunged 23% to $1.09 billion, which was even more dramatic than the more than 20% drop that most investors had already expected to see. Adjusted net income from continuing operations was down more than 85% to $15 million, and that produced adjusted earnings of just $0.06 per share.

Looking more closely at the numbers, FMC wasn't able to find anywhere to hide. The subsea technologies segment, which brings in most of the company's overall revenue, suffered a drop of more than a fifth in its top line, and the biggest success from the segment was that its operating profit managed to cushion its decline to just 3%. The surface technologies division saw sales drop by more than a quarter from the year-ago period, but it managed to reverse a loss in the fourth quarter of 2015 by posting a small operating profit in this report. The energy infrastructure unit also took a hit of more than 25% on its top line, and its operating loss widened from year-ago levels.

However, there was a little bit of good news on the inbound order front. Overall, inbound orders were down 5% to $794 million, but that was much slower than the drops in recent quarters, and sequentially, the amount was up by more than $100 million from the third quarter of 2016. In the subsea technologies area, inbound order activity actually rose by double-digit percentages.

Still, one troubling aspect came from FMC's order backlog figures. Total backlog plummeted by nearly 40% to $2.65 billion, falling another $370 million or so just in the past three months and reflecting the sluggish levels of activity that FMC has seen recently.

When will FMC Technologies finally rebound?

Nevertheless, FMC is trying to be optimistic about its future. The company said that it has made decisions to exit certain businesses in the North American wellhead market, and it is working at consolidating its facilities in the region to maximize efficiency going forward. FMC believes that the market recovery has begun in North America, and its restructuring is putting the company in position to benefit when the upturn becomes more pronounced.

However, FMC will continue to face pressure in certain markets. The drilling specialist noted that competitive pricing pressure in its international surface business persisted throughout 2016, and it believes that adverse conditions will continue to hurt its profit margin in 2017.

Finally, FMC's report noted that with the Technip merger having been completed in January, it expects to provide performance expectations for the combined company next quarter. That will make investors wait a while before they can see exactly how the two companies will work together, and the corresponding pro forma results that Technip released simultaneously also made little reference to FMC or the combined entity.

Investors in FMC Technologies didn't get a chance to react to the news, as the company announced that it had filed its report with the SEC after the market closed on Friday. Nevertheless, it looks like shareholders will have to wait another few months to see exactly what the combined TechnipFMC will look like, as well as the details about what its prospects will be for the future.