Philadelphia, Pennsylvania, USA
May 2, 2016
First Quarter 2016 Highlights
- Consolidated revenues of $799 million
- Consolidated adjusted earnings per diluted share of $0.58
- Agricultural Solutions segment earnings of $82 million
- Health and Nutrition segment earnings of $47 million
- Lithium segment earnings of $15 million
- Increasing guidance for 2016 adjusted earnings per diluted share by 5 cents to a range of $2.55 to $2.85
FMC Corporation (NYSE: FMC) today reported first quarter revenue of $799 million, a 21 percent increase over the same period in 2015. The company reported net income of $48.3 million, or $0.36 per diluted share, in the first quarter of 2016, as compared to a net loss of $46.8 million, or a loss of $0.35 per diluted share, in the first quarter of 2015. Excluding various restructuring charges, adjusted earnings were $0.58 per diluted share, flat compared to the prior-year quarter.
Pierre Brondeau, FMC president, CEO and chairman said: "We are pleased to have achieved adjusted EPS towards the higher end of our first quarter guidance range and to increase our full-year adjusted EPS guidance by five cents. With Ag Solutions and Health and Nutrition delivering earnings in line with guidance, it was the outperformance by Lithium that drove this strong result and the guidance increase. We came into 2016 expecting challenging agricultural market conditions, particularly in the Americas, and so far these expectations are proving to be accurate. However, the actions we continue to take in managing the business leave us confident in our full-year outlook for Agricultural Solutions."
FMC Agricultural Solutions
First quarter segment revenue for FMC Agricultural Solutions was $546 million, an increase of 39 percent versus reported revenue for the prior-year quarter. Segment earnings were $82 million, which was flat versus prior-year reported results. On a pro forma basis, first quarter segment revenue and earnings each declined 22 percent compared to the same period in 2015, as lower sales volume in North America and Brazil, plus foreign currency swings, more than offset higher prices and the benefits of revenue synergies and new product introductions. Lower third-party product volumes contributed 4 percent to the revenue headwind in the quarter. At the segment earnings level, price increases in Brazil more than offset the year-over-year impact of the weaker real, but the strength of the U.S. dollar resulted in headwinds in Europe, Asia, and other parts of Latin America. Agricultural Solutions segment operating margins were flat year-over-year, on a pro forma basis. For 2016, full-year segment revenue is expected to be in the range of $2.3 billion to $2.5 billion and full-year segment earnings are expected to be in the range of $380 million to $420 million, with second quarter segment earnings in the range of $90 million to $110 million.
FMC Health and Nutrition
FMC Health and Nutrition first quarter segment revenue was $192 million, 9 percent lower versus the prior-year quarter, driven primarily by lower sales in Omega-3 and a 2 percent headwind from foreign currency. Segment earnings of $47 million were down 7 percent compared to the prior-year quarter, principally due to lower revenue, but lower operating costs helped drive an increase in segment operating margins. Segment revenue for the full year of 2016 is expected to be in the range of $775 million to $825 million, while full-year segment earnings are expected to be between $198 million and $208 million. Second quarter segment earnings are expected to be in the range of $49 million to $53 million.
FMC Lithium
FMC Lithium reported first quarter segment revenue of $60 million, an increase of 8 percent from the prior-year quarter, and first quarter segment earnings of $14.9 million, an increase of $9.4 million compared to the first quarter of 2015. Price increases across the portfolio combined with cost reductions contributed the majority of the earnings increase, as the benefits of recent cost savings projects and lower raw material costs were realized. Demand trends across specialty end markets remained strong, driving price increases in both the spot market and new contracts in the first quarter.
Due to the improved forecast for this business, segment earnings are now expected to be between $43 and $53 million for the full year of 2016, more than double 2015 earnings at the mid-point of the range and $10 million higher than previous guidance. Segment revenue for the full year of 2016 is now expected to be in the range of $245 million to $265 million, an increase of $5 million versus prior guidance. Segment earnings in the second quarter are expected to be in the range of $10 million to $14 million.
Corporate and Other
For the quarter, corporate and other expenses were $17 million, and net interest expense was $21 million. Depreciation and amortization was $33.6 million, and capital additions were $27.8 million. On March 31, 2016, gross consolidated debt was $2.1 billion, and debt, net of cash, was $2.0 billion. The Adjusted Tax Rate was 26 percent in the quarter.
2016 Outlook
We are increasing adjusted earnings per share by five cents versus previous guidance to a range of $2.55 to $2.85 for the full year of 2016, an increase of 9 percent (at the mid-point) versus 2015 adjusted earnings per share of $2.47.
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