FMC Agricultural Products Segment Earnings Increase 23 Percent
30 October 2012 FMC Corporation reported another “robust” quarter, driven by Latin America and North America sales and earnings, according to Pierre Brondeau, FMC president, CEO and chairman.
Revenue in Agricultural Products of $423.6 million increased 11 percent versus the prior-year quarter with substantial sales gains in Latin America and North America. In Latin America, sales increased significantly, reflecting strong market conditions, successful new product introductions and increased planted area for soybeans in Brazil, and increased sales via our market access joint venture in Argentina. In North America, sales also increased significantly driven by strong pest pressures. Sales in Asia were up slightly, while sales in Europe/Middle East/Africa were down versus the prior-year period, in part due to unfavorable exchange rate impacts. Segment earnings of $99.8 million increased 23 percent versus the year-ago quarter driven by strong volume growth, partially offset by unfavorable exchange rate impacts and higher spending on targeted growth initiatives.
“FMC delivered another robust quarter, despite the uncertain global economic environment. Agricultural Products showed once again the power of our unique business model, with sales and earnings growth led by Latin America but also supported by strong performance in North America,” Brondeau said. “Specialty Chemicals’ earnings were impacted by the lingering effects of the operational issues we faced earlier in the year in our Lithium business, which continued to reduce segment results. Industrial Chemicals delivered a smaller than expected increase in earnings, with somewhat lower than expected soda ash export prices and poor performance by the zeolites product line in Peroxygens.”
Outlook
Regarding the company’s outlook for 2012, Brondeau said, “For the full year 2012, we are maintaining our previous outlook and continue to expect adjusted earnings of $3.42 to $3.52 per diluted share, a 16 percent increase above last year at the midpoint of this range. Our Agricultural Products segment expects to achieve its ninth consecutive year of record earnings, delivering a mid-twenties percent year-on-year increase in earnings, reflecting increased volumes in all regions, due to strong market conditions and growth from new and acquired products, but partially offset by higher spending on targeted growth initiatives.
Brondeau concluded, “For the fourth quarter of 2012, we expect adjusted earnings of $0.75 to $0.85 per diluted share, up slightly versus the prior year at midpoint of this range, with a mid-teens percent increase in adjusted earnings before interest and taxes dampened by a very low tax rate in the prior year period. In Agricultural Products, we expect segment earnings to be up in the mid- to high-twenties percent reflecting strong growth in Latin America, especially Brazil, partially offset by continued investment in targeted growth initiatives. Specialty Chemicals’ segment earnings are projected to be up in the low single digits percent, driven by improved operational performance in Lithium and with higher selling prices and volumes in BioPolymer largely offset by higher raw material and other operating costs, principally resulting from the unplanned downtime in our Haugesund, Norway facility. And in Industrial Chemicals, we expect fourth quarter segment earnings to be up in the low single-digits percent with higher prices and volumes offset in part by the poor performance of the zeolites product line.”
Source: FMC Corporation, edited by Stefanie A. Valentic, Online Editor
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