FMC Corporation reported a net loss of USD 53.5 million, or USD 0.74 per diluted share, in the fourth quarter of 2010, compared to net income of USD 62.1 million, or USD 0.85 per diluted share, in the…
FMC Corporation reported a net loss of USD 53.5 million, or USD 0.74 per diluted share, in the fourth quarter of 2010, compared to net income of USD 62.1 million, or USD 0.85 per diluted share, in the same quarter of 2009. Net income in the current quarter included restructuring and other income and charges of USD 131.4 million after-tax, or charges of USD 1.81 per diluted share, mainly due to the shutdown of the phosphates business located in Huelva, Spain, compared to restructuring and other income and charges of USD 6.8 million after-tax, or charges of USD 0.09 per diluted share, in the 2009 quarter. Excluding these items in both periods, the company earned USD 1.07 per diluted share in the current quarter, up 14% compared to USD 0.94 per diluted share in the 2009 quarter. Fourth quarter revenue of USD 810.5 million was up 12% from the USD 722.1 million in 2009. Pierre Brondeau, FMC president, chief executive officer and chairman, said, Our fourth quarter results provided a strong finish to a record year for FMC. Agricultural Products realized higher sales in all major product lines and most key regions. Speciality Chemicals“ performance was driven by broad-based volume growth and operating cost reductions in lithium. Industrial Chemicals“ performance met expectations and is now strategically realigned and well positioned to deliver sustained higher margins, greater earnings stability and superior return on net assets. Revenue in Agricultural Products of USD 334.5 million increased 24% versus the prior-year quarter driven by higher sales in all major product lines and in most key markets. In Latin America, sales increased significantly driven by strong demand in key market segments, particularly cotton and sugarcane, as well as overall growth in planted acres. In Asia, sales gains were driven by continued strong demand and favourable weather conditions. As expected, sales in Europe declined as a result of the ongoing re-registration process for bifenthrin. In North America, sales increased due to better weather conditions than a year ago and higher late-season herbicide sales. Segment earnings of USD 62.0 million increased 32% versus the year-ago quarter, as a result of the sales growth and favourable product mix, partially offset by higher spending on growth initiatives. Revenue in Speciality Chemicals was USD 205.1 million, up 6% versus the year-ago quarter as a result of a robust demand recovery in lithium and favourable commercial performance in BioPolymer, partially offset by reduced selling prices in lithium primaries. Segment earnings of USD 46.1 million increased 15% driven by higher sales, operating cost reductions in lithium and a favourable mix in BioPolymer“s food ingredients business, partially offset by higher raw material costs in BioPolymer. Revenue in Industrial Chemicals of USD 273.1 million increased 5% from the year-ago quarter, driven by volume growth in soda ash, particularly for export, and across global peroxygens product lines, partially offset by the absence of sales from Foret“s sulfur derivatives business, which ceased operations in the second quarter last year. Segment earnings of USD 28.6 million declined 13% as expected, as the sales gain was more than offset by planned maintenance outages, including the successful completion of the boiler repair at our Wyoming soda ash facility early in the fourth quarter. Corporate expense was USD 20.2 million as compared to USD 12.2 million in the prior-year quarter. Interest expense, net, was USD 10.3 million versus USD 7.3 million in the year-ago quarter. On 31 December 2010, gross consolidated debt was USD 637.9 million, and debt, net of cash, was USD 476.4 million. For the quarter, depreciation and amortization was USD 34.6 million and capital expenditures were USD 47.0 million. Revenue was USD 3,116.3 million, an increase of 10% as compared with USD 2,826.2 million in the prior-year period. Net income was USD 172.5 million, a decrease of 25% as compared with USD 228.5 million in the year-earlier period. Net income in the current period included restructuring and other income and charges of USD 181.1 million, versus restructuring and other income and charges of USD 75.6 million in the prior-year period. Excluding these charges, the company earned USD 353.6 million in the current year, an increase of 16% versus USD 304.1 million in the prior year. Revenue in Agricultural Products was USD 1,241.8 million, an increase of 18% versus the prior-year period, driven by strong market conditions in most regions, particularly Latin America, Asia and North America, and growth from new or recently introduced products. Segment earnings of USD 309.5 million increased 7% from a year ago, as the sales gains were partially offset by higher first-half inventory and distribution costs, increased selling and administrative expenses and higher spending on growth initiatives. Revenue in Speciality Chemicals was USD 824.5 million, an increase of 10% above the prior-year period, led by a robust demand recovery in lithium and favourable commercial performance in BioPolymer. Segment earnings of USD 185.0 million increased 16% versus the year-earlier period as volume gains in lithium and favourable commercial performance in BioPolymer were partially offset by higher raw material costs. Revenue in Industrial Chemicals was USD 1,054.8 million, an increase of 3% versus the prior-year period, as volume gains across most 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 USD 122.9 million increased 37% 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 USD 63.0 million as compared to USD 44.1 million in the year-earlier period. Interest expense, net, was USD 39.3 million versus USD 27.0 million in the prior-year period. For the period, depreciation and amortization was USD 133.6 million and capital expenditures were USD 142.3 million. Starting with our outlook for 2011, we will exclude from earnings before restructuring and other income and charges the impacts of the amortization of gains and losses on our accumulated benefit obligations and return on assets of our defined benefit pension plans and other post-employment benefits. In the future we will define this to be adjusted earnings. Remaining in our adjusted earnings will be the current year expense of our benefit obligations under those plans. Had we adopted this definition in 2010 our full-year earnings per share, before restructuring and other income and expense, would have been 11 cents higher than reported, or USD 4.95. We are making this change as we believe that removing the impact of the amortizations provides a better understanding of the underlying profitability of our business and provides better period-over-period comparability. Further details on these changes, including the changes by quarter in 2010 are in our Non-GAAP disclosures on our website, www.fmc.com/investor relations. Regarding the outlook for 2011, Brondeau said, We plan to deliver another record year. For the full year 2011, we expect adjusted earnings of USD 5.35 to USD 5.75 per diluted share, a 12% increase above our adjusted 2010 earnings of USD 4.95 per diluted share. Our Agricultural Products segment expects to achieve its eighth straight year of record earnings, up in the high-single digits versus a year ago due to expected strong market conditions and growth in new and recently introduced products while increasing spending on growth initiatives. Speciality Chemicals“ segment earnings are projected to increase in the low teens reflecting higher sales across all businesses and continued productivity improvements. BioPolymer is expected to achieve its seventh straight year of record earnings driven by continued strong commercial performance, while lithium benefits from higher selling prices, favourable mix and operating cost reductions. In our Industrial Chemicals segment, we expect earnings to be up in the mid-twenties driven by higher selling prices and volume growth augmented by the benefit of cost reduction initiatives. For the first quarter of 2011, we expect adjusted earnings of USD 1.35 to USD 1.50 per diluted share. Agricultural Products“ segment earnings are expected to be level to the prior-year quarter, as the absence of bifenthrin volumes in Europe due to the ongoing re-registration process and higher spending on growth initiatives offset growth in other regions. Speciality Chemicals“ segment earnings are expected to be up in the low teens reflecting higher sales across all businesses and continued productivity improvements. In our Industrial Chemicals segment, we expect earnings to increase approximately 10% driven by volume growth and higher selling prices across its businesses. FMC Corporation is a diversified chemical company serving agricultural, industrial and consumer markets globally for more than a century. The company employs over 4,800 people throughout the world in three business segments: Agricultural Products, Speciality Chemicals and Industrial Chemicals.