Chemical company FMC Corporation’s (FMC) consolidated adjusted earnings for fourth-quarter 2013 were $1.05 per share, surpassing the Zacks Consensus Estimate of 95 cents and also exceeding the year-ago adjusted earnings of 77 cents per share. Adjusted earnings exclude charges of 85 cents per share, mainly related to the sale of the Peroxygens business.
Consolidated profit, as reported, slid 73.5% year over year to $27.1 million (or 20 cents per share) from $102.2 million (or 74 cents a share) a year ago, hurt by sizable charges.
For full-year 2013, adjusted earnings increased 14% year over year to $3.88 per share. It exceeded the Zacks Consensus Estimate of $3.79 per share.
Revenues rose roughly 24% year over year to $1,130.7 million in the reported quarter. It beat the Zacks Consensus Estimate of $1,046 million. For 2013, revenues increased 14% year over year to $3,874.8 million, but missed the Zacks Consensus Estimate of $3,944 million.
Segment Results
Revenues from the Agricultural Solutions division jumped 38% year over year to $677.7 million in the reported quarter on the heels of continued market penetration in Brazilian soybean applications, new products and strong demand due to higher cotton acreage. Early season demand in North America also led to increased sales volumes for pre-emergent herbicides and insecticides.
Health and Nutrition segment’s sales rose 13% to $189.8 million in the quarter on higher volumes of colloidal microcrystalline cellulose and pharmaceutical binders. Segment profit increased 13% to $40.4 million, but was lower than the previous guidance due to a delayed startup of the Seals Sands omega-3 production facility in the U.K. However, the plant is currently operational and is expected to deliver initial sales in the first quarter of 2014.
Revenues from the Minerals unit went up 3% to $263.2 million. Profit slipped 18% year over year to $36.2 million. During the quarter, Alkali Chemicals completed the move of its long-wall operations into a new section and achieved sequentially higher Asian soda ash pricing. Increased soda ash volume and improved pricing was offset by costs associated with the long-wall move.
Balance Sheet
Cash and cash equivalents as of Dec 31, 2013, were $123.2 million compared with $77.1 million as of Dec 31, 2012, up 60%. Long-term debt rose 27% year over year to $1,154.1 million.
Outlook
For 2014, FMC Corp. expects adjusted earnings to be in the band of $4.35 to $4.55 per share, representing a 15% year-over-year rise at midpoint of the range.
FMC Corp. expects above-market rate growth to continue into 2014 for its Agricultural Solutions segment. It forecasts full-year segment earnings to increase in mid-teens clip over 2013 driven by favorable market conditions, continued market share gains and new product introductions.
FMC Corp. expects growth from food and pharmaceutical ingredients, mainly in emerging markets, in 2014. Earnings are anticipated to increase in mid-teens clip versus 2013. FMC expects earnings in Minerals segment to increase in high-teens clip as a result of improved operating performance from both Lithium and Alkali Chemicals.
FMC Corp. is a leading diversified chemical company, serving agricultural, industrial, environmental and consumer markets across the globe.
FMC Corp. currently retains a short-term Zacks Rank #3 (Hold).
Some better-ranked stocks in the chemical industry include Northern Technologies International Corp. (NTIC), Methanex Corp. (MEOH) and L'Air Liquide SA (AIQUY). While Northern Technologies and Methanex carry a Zacks Rank #1 (Strong Buy), L'Air Liquide retains a Zacks Rank #2 (Buy).
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