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FMC Corp (FMC) Q4 Earnings, Revenues Trail Estimates

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FMC Corp. (FMC - Free Report) swung to a profit (on a reported basis) of $15.9 million or 12 cents per share in fourth-quarter 2016 from a loss of $204.1 million or $1.53 per share a year ago.

Barring one-time items including restructuring charges, earnings came in at 88 cents per share in the quarter, missing the Zacks Consensus Estimate of 89 cents.

The chemical maker’s revenues fell roughly 4% year over year to $865.6 million in the reported quarter. Sales also missed the Zacks Consensus Estimate of $926 million.

For full-year 2016, profit fell roughly 57% year over year to $209.1 million or $1.56 per share.

Sales for the year were essentially flat year over year at $3,282.4 million.

FMC Corporation Price, Consensus and EPS Surprise

 

FMC Corporation Price, Consensus and EPS Surprise | FMC Corporation Quote

Segment Review

Revenues from the Agricultural Solutions division fell around 6% year over year to $618 million in the reported quarter owing to reduced sales across Latin America and Europe. Segment profits were $127 million, up 25% year over year, driven by pricing strength.

Health and Nutrition segment’s sales rose 3% year over year to $177 million in the quarter. Segment profit climbed 17% year over year to $54 million, gaining from lower manufacturing costs.  

Revenues from the Lithium unit edged up 1% to $71 million. Segment earnings zoomed 91% year over year to $21 million, aided by higher prices.

Balance Sheet

FMC Corp. ended 2016 with cash and cash equivalents of $64.2 million, down around 18% year over year. Long-term debt was $1,798.8 million, down around 12% year over year.

Outlook

FMC Corp. sees adjusted earnings in the band of $3.20 to $3.60 per share for 2017, a year over year increase of 20% at the mid-point of the guidance range.

The company expects revenues in the range of $2.2−$2.4 billion for its Agricultural Solutions unit for 2017. Segment earnings for the year are expected to be in the band of $410 million to $450 million. Earnings for first-quarter 2017 have been projected in the range of $60−$70 million.

For Health and Nutrition, the company expects revenues of between $750 million and $790 million for 2017. Segment earnings are expected to be $190−$200 million. For the first quarter, segment earnings are expected to be in the band of $45−$50 million.

FMC Corp. sees revenues in the range of $315−$355 million for the Lithium unit for 2017. Segment earnings are forecast to be in the band of $90−$110 million for the full year. For the first quarter, earnings are expected to be in the range of $18−$22 million.

FMC Corp.’s shares have gained 73.6% over a year, outperforming the Zacks categorized Chemicals-Diversified industry’s gain of 32.4% over the same period.


 

While FMC Corp. faces challenging agriculture market fundamentals and currency headwinds, it should gain from strategic investments, synergies of Cheminova A/S acquisition and new product launches. The company remains committed to expand its market position and strengthen its portfolio. FMC Corp. remains committed to invest in technologies in its agriculture business and launching new products with a goal to enhance value to the farmers.

Zacks Rank & Key Picks

FMC Corp. has a Zacks Rank #2 (Buy).

Other well-placed companies in the chemical space include Kronos Worldwide, Inc. (KRO - Free Report) , Methanex Corporation (MEOH - Free Report) and Albemarle Corporation (ALB - Free Report) .

Kronos sports a Zacks Rank #1 (Strong Buy) and has an expected long-term growth of 5%. You can see the complete list of today’s Zacks #1 Rank stocks here.
    
Methanex has an expected long-term growth of 15% and carries a Zacks Rank #1.

Albemarle holds a Zacks Rank #2 and has an expected long-term growth of 10%.

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