Full year: FMC AG revenue down 1%, earnings up 18%

FMC Corporation (NYSE: FMC) has reported net income of $62.1 million, or $0.85 per diluted share, in the fourth quarter of 2009, versus net income of $46.3 million, or $0.63 per diluted share, in the fourth quarter of 2008. Net income in the current quarter included restructuring and other income and charges of $6.8 million after-tax, or charges of $0.09 per diluted share, versus restructuring and other income and charges of $29.1 million after-tax, or charges of $0.39 per diluted share, in the prior-year quarter. Excluding these items in both periods, the company earned $0.94 per diluted share in the current quarter, a decrease of 8 percent versus $1.02 per diluted share in the prior-year quarter. Fourth quarter revenue of $722.1 million was 2 percent lower than $737.7 million in the prior year.

Pierre Brondeau, FMC president and chief executive officer, said, "Our fourth quarter results met our expectations. We realized continued strong performance in Agricultural Products and Specialty Chemicals. Industrial Chemicals demand, though lower than prior year, once again improved on a sequential basis. Agricultural Products results were primarily driven by sales gains in Latin America. Specialty Chemicals earnings growth was the result of strong commercial performance in BioPolymer. Industrial Chemicals results were impacted by reduced selling prices in phosphates and lower soda ash volumes. As we enter 2010, we are seeing continued sequential volume growth across our businesses."

Revenue in Agricultural Products of $269.5 million increased 12 percent versus the prior-year quarter led by sales gains in Latin America, particularly in Brazil due to improved market conditions in several key crops and growth from new products. North America sales declined, reflecting the impact of less favorable weather conditions. In Europe and Asia, sales increased primarily due to favorable currency impacts and increased contribution from growth initiatives. Segment earnings of $46.8 million increased 39 percent versus the year-ago quarter, reflecting the sales growth, lower manufacturing costs and favorable currency impacts.

Revenue in Specialty Chemicals was $194.2 million, up 2 percent versus the year-ago quarter driven by strong commercial performance in BioPolymer, particularly in food ingredients markets, as a result of higher volumes and selling prices. Performance in lithium was impacted by lower volumes in lithium primaries relative to a year ago, though volumes continued to increase on a sequential basis relative to prior quarters. Segment earnings of $40.1 million were 14 percent higher than the year-ago quarter, driven by revenue gains and favorable product mix in BioPolymer partially offset by lower lithium performance.

Revenue in Industrial Chemicals of $260.1 million declined 16 percent from the prior-year quarter driven by reduced phosphates selling prices and lower soda ash volumes. Soda ash demand, particularly in export markets, continued to improve on a sequential basis relative to the third quarter. Segment earnings of $32.7 million were 39 percent lower than the year-ago quarter as a result of the lower sales, partially offset by lower raw material and energy costs.

Corporate expense was $12.2 million, versus $12.3 million in the prior-year quarter. Interest expense, net, was $7.3 million, as compared to $7.4 million in the year-ago quarter. On December 31, 2009, gross consolidated debt was $643.9 million, and debt, net of cash, was $567.3 million. For the quarter, depreciation and amortization was $33.7 million and capital expenditures were $54.4 million.

Full-Year Results

Revenue was $2,826.2 million, a decrease of 9 percent as compared with $3,115.3 million in the prior-year period. Net income was $228.5 million, 25 percent lower than $304.6 million in the year-earlier period. Net income in the current period included restructuring and other income and charges of $75.6 million, versus restructuring and other income and charges of $46.5 million in the prior-year period. Excluding these charges, the company earned $304.1 million in the current year, a decrease of 13 percent versus $351.1 million in the prior year.

Revenue in Agricultural Products was $1,051.6 million, a decrease of 1 percent versus the prior-year period, as sales gains in the Americas and in non-crop markets were offset by lower sales in Europe and Asia. Segment earnings of $289.0 million increased 18 percent from the prior year, driven by growth from new products, particularly in North America and Brazil, better second half market conditions in Brazil, higher selling prices in most regions and lower raw material costs.

Revenue in Specialty Chemicals was $753.1 million, 1 percent lower than the prior-year period, as strong commercial performance in BioPolymer was more than offset by lower lithium volumes and unfavorable currency translation. Segment earnings of $159.6 million increased 5 percent versus the year-earlier period as favorable commercial performance and the benefits of acquisitions in BioPolymer were partially offset by lower lithium volumes and unfavorable currency translation.

Revenue in Industrial Chemicals was $1,026.7 million, a decrease of 21 percent versus the prior-year period, as lower volumes across the segment and selling prices in phosphates more than offset higher selling prices in most other businesses. Segment earnings of $89.7 million declined 55 percent versus the year-earlier period, driven by the sales decline.

Corporate expense was $44.1 million, down from $49.8 million in the year-earlier period. Interest expense, net, was $27.0 million, as compared to $31.9 million in the prior-year period. For the period, depreciation and amortization was $127.2 million and capital expenditures were $161.2 million.

Outlook

Regarding the outlook for 2010, Brondeau said, "Despite the expected tempered, uneven recovery in global markets, we anticipate delivering a year of strong performance. For the full year 2010, we expect earnings before restructuring and other income and charges of $4.35 to $4.75 per diluted share.

"For the first quarter of 2010, we expect earnings before restructuring and other income and charges of $1.20 to $1.35 per diluted share. In Agricultural Products, we look for earnings growth in the mid-single digits versus the year ago quarter, as improved market conditions in Brazil and the timing of shipments in Europe are partially offset by increased spending on growth initiatives. In Specialty Chemicals, we expect earnings to be up 5-10 percent compared to the prior-year quarter, driven by higher volumes and improved efficiencies across the segment. In Industrial Chemicals, earnings are expected to be level to up 10 percent versus the year-ago quarter, as higher volumes and lower raw material and energy costs are partially offset by reduced selling prices."