FMC Warns About Ag Results

FMC is following Monsanto and DuPont with warnings about earnings declines due to the impact of a weakening of Brazil’s currency, the real, on its agricultural chemical business. And like the others, the company is responding with cost cutting. FMC has reduced its full-year earnings target to $2.35–$2.45 per share from the $3.00–$3.30 it had forecast earlier this year. A 50% devaluation of the real, about half of which came in the last quarter alone, “has created significant headwinds” for its agricultural chemical business, the company says. It estimates the hit to be as much as $240 million. As a result, FMC is paring operations in the region to focus on high-value chemicals rather than commodity products. The company has already signed a deal to sell its generic crop protection business Consagro Agroquimica, and by the end of this year, it expects to reduce employment in Brazil to half of 2014 levels. Overall, FMC’s cost-reduction efforts, including the integration of the Cheminova crop protection business it purchased earlier this year, will cut costs by as much as $160 million and deplete headcount by up to 850 employees, about 12% of its workforce.