Agricultural Segment Boosts FMC Earnings
8 November 2011 FMC Corp.’s Agricultural Products businesses showed significant gain over prior-year sales gains, according to the company’s third quarter 2011 statement.
Revenue in Agricultural Products of $382.1 million increased 24% versus the prior-year quarter, as sales gains were achieved in all regions. While segment earnings were not as high as FMC’s Industrial Chemicals segment (up 20 percent year-over-year), a growth rate of 8% compared to the same quarter last year.
The highest growth was realized in Latin America, particularly Brazil, driven by continued strong market conditions in key crops such as sugarcane, cotton and soybeans, according to the company. In Asia, sales were also up significantly, as a result of newly-launched products, market access initiatives and favorable market conditions in most key countries, including India, Pakistan, China and Thailand. In North America, higher insecticide volumes drove the sales gain.
In Europe, the sales increase was driven by strong herbicide volumes. Segment earnings of $80.9 million increased 8% versus the prior-year quarter, driven by the broad-based sales growth, partially offset by higher raw material costs, less favorable product and geographic mix and increased spending on focused growth initiatives, according to FMC. In addition, segment earnings were unfavorably impacted by a currency-related adjustment due to the rapid devaluation of the Brazilian Real at the very end of the quarter.
FMC Corp. reported net income of $86.8 million, or $1.21 per diluted share, in the third quarter of 2011, versus net income of $82.9 million, or $1.13 per diluted share, in the third quarter of 2010. Third quarter revenue of $862.1 million increased 16 percent excluding the prior-year impact of exited businesses.
“Consistent with our Vision 2015 objectives, we are making focused investments that raise our growth trajectory. In Agricultural Products, we established Ruralco Soluciones, a joint venture in Argentina to directly access the country’s large and growing agrochemicals market and formed collaborations with Chr. Hansen and Marrone Bio Innovations in agricultural biologicals,” said Pierre Brondeau, FMC president, chief executive officer and chairman in a statement.
FMC Corporation expects a strong finish to the year, he added. Adjusted earnings for the fourth quarter are estimated to increase 23 percent from the prior-year’s quarter.
“In Agricultural Products, we look for an earnings increase in the low-teens led by growth in Latin America, partially offset by increased spending on targeted growth initiatives and higher raw material costs,” Brondeau said.
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