FMC Reports Robust Q4 Growth in Health and Nutrition
29 Oct 2013 --- FMC Corporation has reported third quarter revenues of $957.4 million, a 16 percent increase over the same period in 2012. The company reported net income of $17.9 million, or $0.13 per diluted share, in the third quarter of 2013, versus net income of $90.0 million, or $0.65 per diluted share, in the third quarter of 2012.
Third quarter results include charges of $92.3 million after tax, or $0.69 per diluted share, compared to charges of $17.1 million after tax, or $0.12 per diluted share, in the prior-year quarter. Excluding these items in both periods, adjusted earnings were $0.82 per diluted share in the current quarter, an increase of 7 percent versus the prior-year quarter.
FMC Agricultural Solutions' third-quarter segment revenues of $530.2 million increased 25 percent versus the prior-year quarter, driven by a strong start to the Latin American season. Sales in Latin America increased significantly, reflecting a rebound in cotton acreage, increased soybean planted area and growth in newly introduced products. North American markets saw lower demand as a result of pest pressures that were below last year's levels. Third quarter segment earnings of $114.2 million were 13 percent higher than the year-ago quarter as volume gains were partially offset by regional mix, continued investments to support growth and short-term foreign exchange volatility.
The company anticipates continued growth and market penetration in Latin American markets in the fourth quarter. Volume gains in nearly all geographies, plus benefits from newly introduced products, will contribute to a 10th consecutive year of record segment earnings, increasing mid- to high-teens percent over 2012.
FMC Health and Nutrition's third-quarter segment revenues were $190.4 million, up 10 percent versus the year-ago quarter on higher volumes, pricing and partial-quarter contributions from the recent acquisition of Epax. Segment earnings of $41.1 million were 2 percent higher than the prior year as volume growth in food markets was partially offset by a deceleration in pharmaceutical demand, spending in recently acquired businesses and raw material cost increases. The recently acquired Epax business performed as expected, with initial customer reception positive and underlying demand patterns for Omega-3s remaining strong.
The company anticipates strong earnings growth in the fourth quarter through continued strength in the core food market, a return of pharmaceutical demand to typical quarterly levels and increased contribution from Epax. Full-year segment earnings are expected to increase high single-digit percent versus 2012.
FMC Minerals' third-quarter segment revenues of $237.8 million increased 6 percent from the year-ago quarter. Third-quarter segment earnings of $27.7 million were down 20 percent versus the previous year. In Alkali Chemicals, higher global soda ash sales volumes were offset by lower export pricing and one-time production factors that impacted costs. Given these conditions, the company elected to perform further maintenance, which resulted in additional costs in the quarter. The Lithium business, despite year-on-year flat financial performance, demonstrated continuous daily production rates that were 25 to 30 percent above pre-expansion rates in the quarter.
FMC anticipates these process improvements will result in improved Lithium performance in the fourth quarter. In Alkali Chemicals, the company saw improvements in Asian soda ash pricing in the third quarter, and expects this trend to continue in the fourth quarter. For the full year, segment earnings are expected to be down mid- to low-20's percent versus the previous year, as Alkali volume increases will be offset by lower average soda ash export pricing and by the Lithium operational challenges from earlier in the year.
Pierre Brondeau, FMC president, CEO and chairman, said: "We are pleased with the performance in the Agricultural Solutions business that has continued to outpace market growth. The Health and Nutrition business is now positioned to demonstrate strong revenue and earnings growth going forward. Our Minerals business is recovering with export prices increasing and lithium operational improvements successfully implemented.
"Despite a challenging year, we expect to deliver a solid performance with 13 percent revenue growth and 12 percent adjusted earnings per diluted share growth. We remain confident that all of our businesses are now aligned to finish 2013 in a position of strength and poised to accelerate growth in 2014."
For the fourth quarter, the company anticipates adjusted earnings of $0.90 to $1.00 per diluted share, a 23 percent increase over 2012 adjusted earnings at the midpoint of this range. The company expects full-year adjusted earnings of $3.74 to $3.84 per diluted share, a 12 percent increase over 2012 adjusted earnings at the midpoint of this range. Current outlook reflects growth in Agricultural Solutions and Health and Nutrition, partially offset by weakness in the Minerals segment.
