FMC Agricultural Solutions reported lower fourth-quarter revenue but a sharply higher profit, boosted by strong pricing in Latin America despite the strengthening of the U.S. dollar.
Fourth-quarter segment revenue was $618 million, down 6% from $657.3 million principally due to lower sales in Latin America and Europe. Segment earnings, however, increased 25% to $127.1 million compared to the fourth quarter of 2015, driven by FMC’s ability to maintain pricing, principally in Latin America, despite the strengthening of the U.S. dollar.
Segment revenue for 2016 was $2.27 billion, a 1% increase compared to the prior year, while full-year segment earnings were $400 million, a 10% increase compared to the prior year. Segment earnings margin improved 140 basis points to 17.6 percent.
For 2017, full-year segment revenue is expected to be approximately $2.2 billion to $2.4 billion and full-year segment earnings are expected to be in the range of $410 million to $450 million, an increase of 8% at the mid-point compared to the prior year. First-quarter segment earnings are expected to be in the range of $60 million to $70 million, a decrease of approximately 20% at the mid-point compared to the prior year quarter. Earnings growth in 2017 is expected to be driven by lower operating costs and higher volumes, offset partially by unfavorable foreign exchange.
Pierre Brondeau, FMC president, CEO and chairman said: “FMC delivered another solid quarter, to cap a year of strong quarterly performances. In Ag Solutions, we focused on maintaining price and terms rather than volume, and we rationalized low-margin products to improve the foundations of that business.”