3rd Qtr: FMC's Revenue Up 16%, Earnings Up 18%
Tuesday, November 1st, 2011
• Third quarter 2011 adjusted earnings of $1.39 per diluted share up 18 percent; revenue increase of 16 percent excluding prior-year impact of exited businesses
• Agricultural Products' segment earnings up 8 percent; Specialty Chemicals' segment earnings up 1 percent; Industrial Chemicals' segment earnings up 20 percent
• Fourth quarter 2011 outlook for adjusted earnings of $1.30 to $1.40 per diluted share, a 23 percent increase at midpoint of range
• Full-year 2011 outlook for adjusted earnings of $5.70 to $5.80 per diluted share, a 16 percent increase at midpoint of range; raises midpoint of range versus previous outlook
• $100 million in share repurchases completed in third quarter 2011
FMC Corporation (NYSE: FMC) today 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. Net income in the current quarter included restructuring and other income and charges of $12.4 million after-tax, or charges of $0.18 per diluted share, versus restructuring and other income and charges of $3.1 million after-tax, or charges of $0.05 per diluted share, in the prior-year quarter. Excluding these items in both periods, the company earned $1.39 per diluted share in the current quarter, an increase of 18 percent versus $1.18 per diluted share in the prior-year quarter. Third quarter revenue of $862.1 million increased 16 percent excluding the prior-year impact of exited businesses.
Pierre Brondeau, FMC president, chief executive officer and chairman, said, "We delivered another quarter of strong performance as demand across our businesses and diverse end markets remains healthy, particularly in rapidly developing economies. We continue to see rich opportunities for organic growth across our businesses and make good progress advancing our external growth initiatives."
Brondeau continued, "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. In BioPolymer, we announced an agreement to acquire BioGroup, a leading natural colors and specialty nutrition ingredients producer to broaden our food and pharmaceutical ingredients portfolio. In Peroxygens, we completed the purchase of the persulfates business of RheinPerChemie to accelerate our shift to high-margin specialty peroxygens. And in our soda ash business, we formed Natronx Technologies in partnership with Church & Dwight and TATA Chemicals to manufacture and market sodium-based, dry sorbents for air pollution control in electric utility and industrial boiler operations.
"While making these investments to support attractive organic growth and focused external initiatives, we also completed the repurchase of $100 million of our stock in the third quarter. We look for a strong finish to 2011 with key performance metrics on or above trend line toward realizing our Vision 2015 objectives," Brondeau said.
Revenue in Agricultural Products of $382.1 million increased 24 percent versus the prior-year quarter, as sales gains were achieved in all regions. 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. 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 percent 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. 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.
Revenue in Specialty Chemicals was $217.9 million, up 8 percent versus the year-ago quarter driven primarily by higher selling prices across the segment and volume growth in pharmaceutical excipients and lithium specialties. In BioPolymer, sales gains were driven by higher selling prices across the business and pharmaceutical excipients volumes in India and Europe. Lithium sales growth was driven by higher selling prices in both lithium primaries and specialties and volume gains in energy storage and synthesis markets. Segment earnings of $47.6 million were 1 percent higher than the prior-year quarter, as the strong commercial performance was largely offset by higher raw material and energy costs and weather-related operating impacts at our Argentina lithium facility incurred early in the quarter.
Revenue in Industrial Chemicals of $264.0 million increased 12 percent excluding the prior-year impact of exited businesses, driven by higher selling prices for soda ash and peroxygens and volume gains in soda ash resulting from the startup of our Granger facility early in the quarter. In soda ash, higher volumes and selling prices in export markets were the primary drivers of the sales gain. In Peroxygens, higher selling prices were realized in all product lines. Segment earnings of $36.0 million increased 20 percent versus the year-ago quarter as a result of the broad-based sales gains and continued favorable mix shift toward specialty peroxygens, partially offset by a longwall mining equipment move in soda ash and feedstock supply disruptions in Peroxygens.
Corporate expense was $12.8 million as compared to $15.9 million in the prior-year quarter. Interest expense, net, was $9.1 million versus $9.6 million in the year-ago quarter. On September 30, 2011, gross consolidated debt was $571.1 million, and debt, net of cash, was $461.7 million. For the quarter, capital expenditures were $48.0 million and depreciation and amortization was $31.6 million.
Regarding the outlook for 2011, Brondeau said, "We anticipate a strong finish to the year. For the fourth quarter of 2011, we expect adjusted earnings of $1.30 to $1.40 per diluted share, a 23 percent increase versus the year-ago quarter at the midpoint of this range. 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. In Specialty Chemicals, we expect earnings growth in the mid-teens, as higher volumes and selling prices in all BioPolymer and lithium product lines are partially offset by higher raw material costs. In Industrial Chemicals, we project earnings growth of approximately 50 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."
Brondeau concluded, "For the full year 2011, we have raised the midpoint of our previous outlook and now expect adjusted earnings of $5.70 to $5.80 per diluted share, a 16 percent increase above last year at the midpoint of this range. Agricultural Products is expected to deliver its eighth consecutive year of record earnings, up approximately 10 percent. Specialty Chemicals is expected to deliver its sixth consecutive year of record earnings, up in the high single digits, led by the seventh consecutive year of record earnings in BioPolymer. In Industrial Chemicals, we expect strong performance, with earnings up 25 to 30 percent driven by broad-based sales growth across soda ash and peroxygens and the continued favorable mix shift toward specialty peroxygens."
FMC will conduct its third quarter conference call and webcast at 11:00 a.m. ET on Tuesday, November 1, 2011. This event will be available live and as a replay on the internet at http://www.fmc.com. Prior to the conference call, the company will also provide on its website its 2011 Outlook Statement, supplemental information including its definitions of non-GAAP terms and reconciliations of non-GAAP figures to the nearest available GAAP term.
FMC Corporation is a diversified chemical company serving agricultural, industrial and consumer markets globally for more than a century with innovative solutions, applications and quality products. With sales of approximately $3.1 billion, the company employs approximately 5,000 people throughout the world and operates its businesses in three segments: Agricultural Products, Specialty Chemicals and Industrial Chemicals. For more information, visit www.FMC.com.