FMC Revenues Rise in Q1, Boosted by Omega-3 Portfolio
08 May 2014 ---- FMC Corporation has reported quarterly revenues of $942 million in the first quarter, a 3 percent increase over the same period in 2013. The company reported net income of $65.6 million, or $0.49 per diluted share, in the first quarter of 2014, compared to net income of $130.9 million, or $0.94 per diluted share, in the first quarter of 2013.
First quarter results include charges of $61.3 million after tax, or $0.46 per diluted share, compared to charges of $18.1 million after tax, or $0.14 per diluted share, in the prior-year quarter. Excluding these items in both periods, adjusted earnings were $0.95 per diluted share, a decrease of 12 percent versus the prior-year quarter.
First-quarter segment revenues for FMC Agricultural Solutions were $466.9 million, a decrease of 6 percent versus the prior-year quarter. First-quarter segment earnings were $120.1 million, a 26 percent decrease over the prior-year quarter. In North America, persistent cold weather throughout the quarter delayed demand for pre-emergent products, and in Brazil, dry conditions depressed production in sugarcane. Segment operating margin was lower compared to the prior-year quarter primarily due to unfavorable foreign exchange impacts, continued investment in sales, marketing and technical personnel and weather-related changes in product mix.
For the remainder of the year, multiple factors will contribute to delivering the expected mid-teens percent growth in full-year segment earnings over 2013. A recovery from delayed first quarter sales and a favorable crop mix toward soybeans in North America will drive greater demand for FMC's herbicides compared to the previous planting season. In Latin America, larger cotton and soybean acres and increased sugarcane production in Brazil will contribute to greater growth in the second half of 2014. New product introductions and benefits from market access investments will also contribute to expected growth.
First-quarter segment revenues for FMC Health and Nutrition were $226.2 million, an increase of 18 percent versus the prior-year quarter. Segment earnings of $50.9 million were 17 percent higher than the prior-year quarter. Earnings growth was driven by demand for colloidal MCC and pharmaceutical binders and contributions from omega-3, partially offset by unfavorable foreign exchange impacts. In the quarter, the company received the required regulatory approvals for its new Seal Sands, U.K., plant and began commercial sales of new pharmaceutical grade omega-3 product lines.
The company maintains its expectation of a full-year 2014 segment earnings increase of mid-teens percent versus 2013 driven by higher volumes in texture and stability solutions, omega-3s, natural colors and binder product lines.
First-quarter segment revenues for FMC Minerals were $248.7 million, an increase of 11 percent from the prior-year quarter. First-quarter segment earnings of $36.8 million were up 27 percent versus the prior-year quarter. As expected, revenue growth was driven in Alkali Chemicals by year-over-year improvements in Asian soda ash pricing and increased production volumes in the quarter. This was partially offset by headwinds primarily related to higher energy costs. Lithium manufacturing operations performed according to plan with higher production volumes meeting increased demand, especially in energy storage applications. In the quarter, Lithium's operating margin continued to increase, reaching the low-teens percent, and it is expected to continue to improve in the remaining quarters of the year.
In the full-year outlook for Alkali Chemicals, FMC is maintaining its approach of only including current contract prices when forecasting pricing improvements. Segment earnings in 2014 are expected to be up in the high-teens percent versus the previous year, primarily driven by improved Lithium operations, incremental soda ash volume increases and more favorable contractual soda ash pricing versus 2013.
Pierre Brondeau, FMC president, CEO and chairman, said: "Overall, our businesses performed as expected in the first quarter and, despite the weather impacting our Agricultural Solutions business in the quarter, we are reaffirming our outlook for the full year. We are confident that our new product innovations and strong customer relationships will deliver another record year in Agricultural Solutions. Health and Nutrition continues to experience demand growth in its core end markets that will be supplemented by growth in sales of omega-3 products. In FMC Minerals, both Alkali Chemicals and Lithium are performing well and delivering on their targets for both volumes and price.”
"We announced our plan to separate into two publicly-traded companies as part of a long-term strategy to create additional value. We recognize that this process is complex, but we have already made good progress. We created a dedicated Program Management Office to execute the separation-related activities, allowing our businesses to remain focused solely on their operations while the separation takes place."
