FMC Health and Nutrition Earnings Up 11 Percent
31 Jul 2014 --- FMC Corporation has reported quarterly revenue of $987.8 million in the second quarter, a 13 percent increase over the same period in 2013. The company reported net income of $109.1 million, or $0.81 per diluted share, in the second quarter of 2014, compared to net income of $118.0 million, or $0.86 per diluted share, in the second quarter of 2013.
Second quarter results include charges of $26.6 million after tax, or $0.20 per diluted share, compared to charges of $9.9 million after tax, or $0.07 per diluted share, in the prior-year quarter. Excluding these items in both periods, adjusted earnings were $1.01 per diluted share, an increase of 9 percent versus the prior-year quarter.
Second-quarter segment revenue for FMC Health and Nutrition was $207.1 million, an increase of 9 percent versus the prior-year quarter. Segment earnings of $49.1 million were 11 percent higher than the prior-year quarter. Revenue growth was driven by strong demand in health markets and contributions from omega-3 products, partially offset by weaker than expected demand for nutrition products in Asia.
Full-year segment revenue is expected to increase low- to mid-teens percent versus 2013 driven by strong demand in health markets, particularly in Europe and Asia, and contributions from omega-3 and texture and stability solutions in nutrition markets. Full-year segment earnings are expected to grow mid-teens percent versus 2013 driven by the increased revenue.
Second-quarter segment revenue for FMC Agricultural Solutions was $531.2 million, an increase of 20 percent versus the prior-year quarter. Second-quarter segment earnings were $130.7 million, a 5 percent increase over the prior-year quarter. In the quarter, year-on-year revenue gains were driven by increased demand for FMC's Authority brand pre-emergent herbicides in North American soybeans and increased herbicide sales in Europe. These sales gains were partially offset by lower North American sales of Capture LFR at-plant insecticides and continued weak demand from Brazilian sugarcane growers. Segment operating margin decreased compared to the prior-year quarter due to the change in product mix described above, increased business spending and unfavorable foreign exchange movements.
For the full year, segment revenue is expected to increase mid- to high-single digits percent, and segment earnings are expected to grow mid-single digits percent over 2013. Latin American new product introductions and market share gains in cotton and soybeans will be the primary drivers of revenue and earnings growth in the second half of 2014.
Pierre Brondeau, FMC president, CEO and chairman, said: "The second quarter again demonstrated the strength of FMC with all businesses showing year-on-year earnings growth. The quarter was another challenging period for the crop protection industry, but our Agricultural Solutions business delivered a solid performance above the industry. We were pleased with the performance in Health and Nutrition and Minerals, with both businesses performing strongly ahead of last year.”
"As we look toward the second half of 2014, we expect that Latin America will once again drive most of the year-over-year growth in Agricultural Solutions. We are launching new products and expanding our market access positions outside of Brazil. In Health and Nutrition, we continue to see increasing demand for functional ingredients in all of our end markets. In Minerals, we expect that operational improvements along with higher soda ash pricing will result in strong earnings growth for the full year.
"We continue to make progress against the strategic objectives of the Vision 2015 plan. We have grown our market leading positions and expanded our current portfolios, while investing in a robust pipeline that will drive future value for our shareholders. Organic growth has surpassed our expectations, compared to M&A-driven growth that has lagged our original targets. We have returned over $1 billion of cash to shareholders since the start of the plan. We are very pleased with our accomplishments on Vision 2015 and continue to focus on strengthening our portfolio and executing on the evolution of FMC."
