FMC Corp. (FMC) Q1 Earnings Top Estimates, Ups FY16 View

FMC Corp. (NYSE:FMC) swung to a profit in first-quarter 2016 on higher sales. The chemical maker posted a profit (as reported) of $48.3 million or 36 cents per share in the reported quarter versus a loss of $46.8 million or 35 cents per share a year ago.

Barring one-time items including restructuring charges, earnings came in at 58 cents per share in the quarter, topping the Zacks Consensus Estimate of 52 cents.

Revenues climbed 21% year over year to $798.8 million in the reported quarter on the back of a double digit rise in sales in the core Agricultural Solutions unit. But sales missed the Zacks Consensus Estimate of $830.5 million.

Segment Review

Revenues from the Agricultural Solutions division surged 39% year over year to $546 million in the quarter. Segment profits were $82 million, flat year over year, as higher pricing offset unfavorable currency impact.

Health and Nutrition segment’s sales slipped 9% year over year to $192 million in the quarter, hit by reduced Omega-3 sales and unfavorable currency impact. Segment profit fell 7% year over year to $47 million, impacted by lower sales.

Revenues from the Lithium unit went up 8% to $60 million. Segment earnings jumped nearly three-fold year over year to $14.9 million, helped by cost savings projects, reduced raw material costs and higher prices. The company saw strong demand across specialty end markets in the quarter.

Balance Sheet

FMC Corp. ended the quarter with cash and cash equivalents of $64.3 million, down around 39% year over year. Long-term debt was $1,986.2 million, up roughly 73% year over year.

Outlook

FMC Corp. raised its earnings guidance for 2016 and now sees adjusted earnings in the band of $2.55 to $2.85 per share (up from the prior view of $2.50 to $2.80 per share) for the year, representing a 9% year-over-year rise at the mid-point of the forecast range.

The company continues to expect revenues for its Agricultural Solutions unit to be roughly $2.3 billion to $2.5 billion for 2016. Segment earnings for the year are expected to be in the band of $380 million to $420 million. Earnings for the second quarter have been forecast in the range of $90 million to $110 million.

For Health and Nutrition, revenues for 2016 are expected to be $775 million to $825 million. Earnings for the year are forecast to be between $198 million and $208 million. For the second quarter, segment earnings are expected to be in the band of $49 million to $53 million.

FMC Corp. now expects earnings for the Lithium unit to be in the band of $43 million to $53 million for 2016 (up from $$33 million to $43 million expected earlier). For the second quarter, earnings are expected to be in the range of $10 million to $14 million. Revenues for 2016 are forecast in the range of $245 million to $265 million.

FMC Corp. is a Zacks Rank #3 (Hold) stock.

Better-ranked companies in the chemical space include Koninklijke DSM N.V. (OTC:RDSMY) , Akzo Nobel N.V. (OTC:AKZOY) and Arkema S.A. (OTC:ARKAY) , all sporting a Zacks Rank #1 (Strong Buy).