Back to top

Analyst Blog

Chemical company  FMC Corporation’s (FMC - Analyst Report) adjusted earnings (excluding one-time items) came in at 92 cents per share in the second quarter of 2012 compared with 77 cents in the year-ago quarter. The results exceeded the Zacks Consensus Estimate of 90 cents.

After including one-time expenses, the company reported earnings of 76 cents per share, up 2.7% from 74 cents in the year ago quarter.

Sales jumped 11.5% year over year to $905.2 million in the quarter, but missed the Zacks Consensus Estimate of $906 million. Sales were aided by strong growth of agricultural Products and higher demand in Latin America.

Segment Performance

Agricultural Products –Revenues rose 19% year over year to $393.6 million, driven by higher demand in Latin America and North America. Earnings jumped 18% to $111.2 million on the back of strong volume growth, partially offset by higher spending on targeted growth initiatives.

Specialty Chemicals – Revenues increased 3% to $235.4 million in the quarter. Higher selling prices were offset by unfavorable currency impact (due to the weakening euro) in the BioPolymer business. Earnings fell 6% to $52.7 million, due to increased raw material costs, continuing impacts of operational issues in Lithium that started in the first quarter and increased investment to support growth initiatives in BioPolymer.

Industrial Chemicals –Revenues increased 9% to $277.1 million on higher selling prices and higher volumes. Earnings for the segment increased 18% to $42.8 million due to favorable mix shift in Peroxygens toward specialties markets.

Financial Performance

The company’s cash and cash equivalents stood at $75.5 million as of June 30, 2012, compared with $158.9 million as of December 31, 2011. Long-term debt was $810 million as of June 30, 2012, compared with $779.1 million as of December 31, 2011.

Acquisition

FMC Corporation, on August 1, 2012, signed a deal with Pectine Italia S.p.A., an Italy-based manufacturer of pectin for the food ingredients market,to acquire its assets for undisclosed terms. Pectine Italia produces pectin, a gelling and thickening agent used widely in many foods. The deal will not only expand FMC Corporation’s global footprint, but will also offer a strategic advantage due to the company’s entry into the pectin market, thereby increasing its portfolio of innovative food ingredients.

Upon completion of the acquisition, Pectine Italia’s pectin business will become part of FMC BioPolymer, a business unit within FMC Corporation’s Specialty Chemicals division. The deal is expected to be completed by the third quarter of 2012.

Outlook

For the third quarter of 2012, FMC Corporation expects adjusted earnings to be in the range of 70 cents to 80 cents per share. For 2012, the company expects adjusted earnings to be in the range of $3.42 to $3.52 per share

FMC Corporation is one of the prominent players in the agrochemical space along with E. I. du Pont de Nemours and Company (DD - Analyst Report), The Dow Chemical Company (DOW - Analyst Report) and Monsanto Company (MON - Analyst Report). Currently, FMC Corporation maintains a Zacks #3 Rank, which translates into a short-term (1 to 3 months) “Hold” rating.

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
RPC INC RES 24.91 +8.35%
LITHIA MOTO… LAD 94.59 +4.60%
DELTA AIR L… DAL 39.15 +3.90%
FLAMEL TECH… FLML 14.51 +3.50%
SOUTHWEST A… LUV 28.87 +2.92%