FMC's Earnings Match Estimate

One of the world's leading diversified chemical companies, FMC Corporation (FMC - Snapshot Report) serving agricultural, industrial and consumer markets reported earnings of 89 cents in the third quarter of 2009. Results were in line with the Zacks Consensus Estimate of 89 cents, though significantly down from $1.13 reported in the same quarter of 2008. 

Revenues plummeted 13% year over year to $713.3 million on lower volumes. However, volumes improved sequentially and are expected to improve further in the next quarter. 

Revenue of $268.3 million in Agricultural Products inched 2% past the previous year with improving sales in Brazil. Segment earnings of $59.2 million increased 34% from the year-ago quarter, reflecting the sales growth in Brazil, lower raw material costs and favorable currency comparisons relative to the prior-year quarter. 

Revenue in Specialty Chemicals was $191.7 million, down 3% year over year on lower lithium sales. Segment earnings of $40.9 million were 14% higher than the year-ago quarter, driven by revenue gains in BioPolymer, but partially offset by lower lithium volumes. 

Revenue in Industrial Chemicals of $254.4 million declined 29% from the prior-year quarter, as lower volumes across the segment. Segment earnings of $20.7 million were 69% lower than the year-ago quarter. 

FMC Corporation reported cash and cash equivalents of $59.9 million of Sep 30, 2009. Debt totaled $541.9 million, 9% lower than $592.9 reported as of Dec 31, 2009. However, FMC's net cash position (long term debt including current portion less cash) is a deficit of $6.6 per share, which might increase its leverage in a scenario of weak demand. 

Outlook 

For the full year 2009, FMC expects earnings before restructuring and other income and charges of $4.05 to $4.15 per diluted share. For the fourth quarter of 2009, the company expects earnings before restructuring and other income and charges of 85 cents to 95 cents per diluted share. 

Sequentially, the company expects earnings to increase 35% to 40% in Agricultural Products, driven by improved market conditions in Brazil, lower raw material costs and further manufacturing productivity improvements. In Specialty Chemicals, earnings are expected to go up 20% with continued strong performance in BioPolymer. In Industrial Chemicals, earnings are expected to be down 30% to 40% on reduced selling prices in phosphates and modestly lower volumes across the segment.