FMC’s 1st half net income up 3%

FMC Corporation reports net income of $65.7 million, or $0.90 per diluted share, in the second quarter of 2010, versus net income of $69.3 million, or $0.94 per diluted share, in the second quarter of 2009.

Net income in the current quarter included restructuring and other income and charges of $28.2 million after-tax, or charges of $0.38 per diluted share, versus restructuring and other income and charges of $11.3 million after-tax, or charges of $0.16 per diluted share, in the prior-year quarter.

Excluding these items in both periods, the company earned $1.28 per diluted share in the current quarter, an increase of 16 percent versus $1.10 per diluted share in the prior-year quarter. Second quarter revenue of $776.8 million was 11 percent higher than $700.3 million in the prior year.

Pierre Brondeau, FMC president and chief executive officer, said, "We delivered another strong quarter. We realized continued strong sales growth in Agricultural Products and Specialty Chemicals and demand recovery in Industrial Chemicals. Agricultural Products sales growth was driven by gains in North America, Latin America and Asia. Specialty Chemicals sales increased as the result of strong commercial performance in BioPolymer and volume growth in lithium primaries. Industrial Chemicals sales benefited from higher volumes across all businesses."

Revenue in Agricultural Products of $293.9 million increased 16 percent versus the prior-year quarter driven by sales gains in North America, Latin America, particularly Brazil, and Asia due to improved market conditions in several key crops and growth from new and recently introduced products. Sales in Europe declined as expected due to a shift in sales from the second quarter to the first quarter. Also as expected, segment earnings of $79.6 million were lower than a year ago, down 12 percent, as sales growth was more than offset by higher inventory costs, import duties in the United States, less favorable geographic mix and higher spending on growth initiatives.

Revenue in Specialty Chemicals was $214.6 million, up 11 percent versus the year-ago quarter led by a robust demand recovery in lithium primaries and higher volumes and selling prices in BioPolymer. Segment earnings of $51.1 million were 26 percent higher than the year-ago quarter driven by strong commercial performance in BioPolymer and higher volumes in lithium primaries partially offset by higher raw material costs.

Revenue in Industrial Chemicals of $269.2 million increased 5 percent from the prior-year quarter as volume gains in soda ash, particularly in export markets, peroxygens and phosphates were partially offset by reduced selling prices and lower electricity sales stemming from the sale of a Spanish cogeneration facility in 2009. Segment earnings of $29.9 million increased 121 percent relative to the year-ago quarter as a result of the broad-based demand recovery and lower raw material and energy costs.

Corporate expense was $14.9 million as compared to $10.3 million in the prior-year quarter. Interest expense, net, was $9.4 million versus $6.5 million in the year-ago quarter. On June 30, 2010, gross consolidated debt was $638.2 million, and debt, net of cash, was $475.8 million. For the quarter, depreciation and amortization was $32.6 million and capital expenditures were $28.2 million.

Six Months Results

Revenue was $1,533.3 million, an increase of 10 percent as compared with $1,390.8 million in the prior-year period. Net income was $143.1 million, an increase of 3 percent as compared with $138.4 million in the year-earlier period. Net income in the current period included restructuring and other income and charges of $49.2 million, versus restructuring and other income and charges of $31.5 million in the prior-year period. Excluding these charges, the company earned $192.3 million in the first half of 2010, an increase of 13 percent versus $169.9 million in the first half of 2009.

Revenue in Agricultural Products was $598.5 million, an increase of 16 percent versus the prior-year period, driven by sales gains in North America, Latin America, particularly Brazil, and Asia due to improved market conditions in several key crops and growth from new and recently introduced products. Segment earnings of $172.4 million declined 6 percent from the first half of 2009, as the sales gains were more than offset by less favorable mix, higher inventory and distribution costs, import duties in the United States and higher spending on growth initiatives.

Revenue in Specialty Chemicals was $417.2 million, a 14 percent increase above the prior-year period, led by strong commercial performance in BioPolymer and a robust demand recovery in lithium primaries. Segment earnings of $91.9 million increased 17 percent versus the year-earlier period as favorable commercial performance in BioPolymer, volume gains in lithium primaries and the benefits of productivity initiatives were partially offset by higher raw material costs.

Revenue in Industrial Chemicals was $519.3 million, an increase of 1 percent versus the prior-year period, as volume gains across all businesses were largely offset by reduced selling prices and lower electricity sales stemming from the sale of a Spanish cogeneration facility in 2009. Segment earnings of $64.4 million increased 77 percent versus the year-earlier period, driven by the strong demand recovery and lower raw material and energy costs, particularly phosphate rock, which more than offset lower selling prices across the segment.

Corporate expense was $27.0 million as compared to $21.6 million in the year-earlier period. Interest expense, net, was $19.4 million versus $13.5 million in the prior-year period. For the period, depreciation and amortization was $66.5 million and capital expenditures were $59.2 million.

Outlook

Regarding the outlook for 2010, Brondeau said, "For the full year 2010, we have raised our outlook for earnings before restructuring and other income and charges to $4.55 to $4.80 per diluted share, a 13 percent increase above last year at the midpoint of this range. We expect Agricultural Products to deliver its seventh straight year of record earnings, up in the mid-single digits, while increasing investment in innovation and continuing to deliver high profit margins. In Specialty Chemicals, earnings are projected to increase approximately 20 percent, as BioPolymer is expected to achieve its sixth straight year of record earnings driven by continued strong commercial performance while lithium realizes significant earnings improvement primarily through strong demand recovery in lithium primaries. In Industrial Chemicals, we expect earnings to be up 25 to 30 percent on the strength of a broad-based volume rebound and favorable raw material and energy costs.

"For the third quarter of 2010, we expect earnings before restructuring and other income and charges of $1.00 to $1.15 per diluted share with double-digit earnings growth in each segment. In Agricultural Products, we look for earnings to be up approximately 25 percent as a result of growth in Brazil and Asia. In Specialty Chemicals, we project earnings to increase approximately 15 percent driven by continued strong commercial performance in BioPolymer and higher volumes in lithium primaries. In Industrial Chemicals, earnings are expected to be up in the low teens as higher volumes and lower raw material and energy costs are partially offset by reduced selling prices and higher plant outage costs."