FMC Reports Net Loss in Q3, Health & Nutrition Impacted by Weak Euro
29 Oct 2015 --- FMC Corporation (FMC) has reported third quarter revenue of $831 million, a 1 percent increase over the same period in 2014. The company reported a net loss of $2.4 million, or a loss of $0.02 per diluted share, in the third quarter of 2015, as compared to net income of $56 million, or $0.42 per diluted share, in the third quarter of 2014.
Excluding certain gains and charges related to the exit of certain businesses and various restructuring charges, adjusted earnings were $0.42 per diluted share, as compared to the prior-year quarter adjusted earnings of $0.72 per diluted share. Adjusted EPS was lower primarily due to the impact of foreign currency headwinds, partially offset by lower operating costs and a lower tax rate.
On October 12, 2015, FMC announced that it would expand and accelerate the Cheminova integration, reorganize the company's operations in Brazil, and increase cost savings targets to reduce enterprise-wide operating costs. Run-rate cost savings will be $140 million to $160 million, compared to the prior target of $90 million. FMC now expects total headcount reductions of 800 to 850 positions, an increase from the previous target of 500 to 550 positions. The majority of the actions to achieve these savings will be implemented within the next six months.
Pierre Brondeau, FMC president, CEO and chairman said: "Our October 12 announcement set out the difficult market conditions our Agricultural Solutions business is facing, particularly in Brazil, which are reflected in our third quarter results and our guidance for the remainder of the year. The actions we are taking will appropriately align Agricultural Solutions' business model and cost base to these market conditions. We are pleased with the faster-than-expected progress integrating Cheminova with FMC. Our combined product portfolio has allowed us to focus on higher margin, proprietary differentiated products and to restructure our cost position to better reflect current market opportunities. The cost reduction actions we have initiated will allow us to deliver an additional $50 million to $70 million of savings in 2016, compared to what we will deliver in 2015."
FMC Health and Nutrition third quarter revenue was $196 million, 3.5 percent lower versus the prior-year quarter. The business continued to experience higher demand for microcrystalline cellulose (MCC) products in pharmaceutical and nutrition applications and improved mix. However, the impact on revenue of the weaker euro compared to the same period last year more than offset the higher volumes in the quarter. Segment earnings of $47 million were up 7.5 percent compared to the prior-year quarter, as higher sales volumes, favorable raw material pricing and lower operating costs more than offset unfavorable foreign currency impacts. Segment revenue for the full year is anticipated to be approximately $800 million, while full-year segment earnings are expected to be between $193 million and $195 million. Fourth quarter segment earnings are expected to be in the range of $45 million to $47 million. Earnings growth is expected to be driven primarily by the ongoing demand in the health and pharmaceutical markets as well as the continued benefits of the operational improvements and restructuring programs implemented over the second half of the year.
