2nd Quarter: FMC's Revenues up 9%, Earnings up 18%
Tuesday, August 2nd, 2011
FMC Corporation (NYSE: FMC) today reported net income of $107.2 million, or $1.49 per diluted share, in the second quarter of 2011, versus net income of $65.7 million, or $0.90 per diluted share, in the second quarter of 2010.
Net income in the current quarter included restructuring and other income and charges of $3.3 million after-tax, or charges of $0.04 per diluted share, versus restructuring and other income and charges of $29.9 million after-tax, or charges of $0.40 per diluted share, in the prior-year quarter.
Excluding these items in both periods, the company earned $1.53 per diluted share in the current quarter, an increase of 18 percent versus $1.30 per diluted share in the prior-year quarter. Second quarter revenue of $812.2 million increased 9 percent excluding the prior-year impact of exited businesses.
Pierre Brondeau, FMC president, chief executive officer and chairman, said, "We delivered another strong quarter as each operating segment achieved double-digit earnings growth. Demand across our businesses and diverse end markets remains very healthy, particularly in rapidly-developing economies. We continue to see rich opportunities for organic growth across our businesses and intend to step up investments in certain growth capital projects.
"We also continue to make good progress advancing our external growth initiatives with the announcements of an agrochemical joint venture in Argentina that enhances our growth and market access in Latin America's second largest crop protection market and a peroxygens acquisition in Europe that accelerates the globalization of our specialty peroxygens business.
"Our balance sheet is strong and cash flow robust. In addition to capital investments to support attractive organic growth and focused external initiatives, we intend to repurchase $100 million of our stock in the third quarter. We begin the second half of 2011 ahead of plan toward realizing our Vision 2015 objectives."
Revenue in Agricultural Products of $329.6 million increased 12 percent versus the prior-year quarter driven by sales gains in Asia, Latin America and EMEA. Sales in Asia improved reflecting continued growth across the region, particularly China, Indonesia and India, enhanced by selective price increases. Sales increased in Latin America, led by Brazil. Sales gains in EMEA were driven by strong herbicide and insecticide volumes. Sales in North America declined reflecting the shift in some herbicide volumes to the first quarter and less favorable weather conditions than a year ago. Segment earnings of $94.3 million increased 18 percent versus the prior-year quarter driven by the broad-based sales growth, partially offset by higher spending on targeted growth initiatives.
Revenue in Specialty Chemicals was $228.5 million, up 6 percent versus the year-ago quarter driven by higher selling prices in all businesses and strong volume growth in pharmaceutical ingredients and lithium specialties. In BioPolymer, sales gains in pharmaceutical ingredients were realized in all product lines while food ingredients sales were driven by dairy and beverage markets in Asia, particularly China. Lithium specialties' sales growth was led by butyllithium serving pharmaceutical and chemical synthesis markets. Segment earnings of $56.0 million were 10 percent higher than the prior-year quarter as a result of the strong commercial performance in BioPolymer and lithium specialties, partially offset by higher raw material costs and higher weather-related operating costs at our Argentina lithium facility.
Revenue in Industrial Chemicals of $254.8 million increased 7 percent excluding the prior-year impact of exited businesses, driven by higher selling prices across soda ash and peroxygens. Segment earnings of $36.2 million increased 21 percent versus the year-ago quarter as a result of the sales gains and continued mix shift toward specialty peroxygens, partially offset by startup costs related to our Granger soda ash facility and higher raw material and energy costs.
Corporate expense was $15.6 million as compared to $14.9 million in the prior-year quarter. Interest expense, net, was $10.5 million versus $9.4 million in the year-ago quarter. On June 30, 2011, gross consolidated debt was $622.9 million, and debt, net of cash, was $436.3 million. For the quarter, depreciation and amortization was $32.3 million and capital expenditures were $40.7 million.
Regarding the outlook for 2011, Brondeau said, "For the full year 2011, we have raised the midpoint of our previous outlook and now expect adjusted earnings of $5.60 to $5.80 per diluted share, a 15 percent increase above last year at the midpoint of this range. Agricultural Products is expected to deliver its eighth-straight year of record earnings, up approximately 10 percent, while increasing investment in innovation and continuing to deliver high profit margins. Specialty Chemicals is expected to deliver its sixth-straight year of record earnings, up approximately 10 percent, led by the seventh-straight year of record earnings in BioPolymer and enhanced by sales gains in lithium specialties, partially offset by increased spending on growth initiatives and higher raw material costs. In Industrial Chemicals, we expect the highest earnings growth performance, up approximately 30 percent on the strength of broad-based sales growth across soda ash and peroxygens and the favorable mix shift toward specialty peroxygens.
"For the third quarter of 2011, we project adjusted earnings of $1.25 to $1.40 per diluted share, a 12 percent increase versus the year-ago quarter at the midpoint of this range. In Agricultural Products, we look for earnings to be level to the year-ago quarter as growth in Latin America is offset by higher raw material costs, increased spending on targeted growth initiatives and lower North American sales due to less favorable weather conditions than last year. In Specialty Chemicals, we project earnings to increase approximately 5 percent as higher volumes and selling prices in BioPolymer and lithium specialties are partially offset by increased spending on growth initiatives in food ingredients in BioPolymer, higher raw material costs and higher weather-related operating costs at our Argentina lithium facility. In Industrial Chemicals, earnings are expected to be up approximately 30 percent, driven by higher selling prices in soda ash and peroxygens, the benefit of volume growth in soda ash export markets and the continued favorable mix shift toward specialty peroxygens.
"Based on our outlook for 15 percent earnings growth for the full-year and 12 percent earnings growth for the third quarter at the midpoints of their respective ranges, this implies a very strong fourth quarter with earnings growth in excess of 20 percent. With the healthy demand we continue to see across our businesses, the diverse end markets we serve and our strength in rapidly-developing economies, we're comfortable with that fourth-quarter outlook."