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FMC Shares Fall on Guidance Cut, Lower Volumes to Hurt Q2
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FMC Corporation (FMC - Free Report) provided an update on its second-quarter and full-year 2023 outlook, which has been adjusted due to significant volume declines caused by an unforeseen and unprecedented reduction in inventory by channel partners. This reduction became evident toward the end of May and persisted throughout the quarter in North America, Latin America and EMEA. The company's shares experienced a decline of 11% as a result of the revised guidance.
The stock has lost 11.5% in the past year against the industry’s rise of 13.5% in the same period.
Image Source: Zacks Investment Research
For the second quarter, FMC now expects revenues to range between $1-$1.03 billion, representing a decrease compared with the earlier guidance of $1.42-$1.48 billion. Adjusted EBITDA for the same period is projected in the range of $185-$190 million, indicating a decline from the previous guidance of $350-$370 million.
Looking at the full-year outlook, the company has adjusted its financial expectations to reflect the current market conditions. Revenues are now anticipated in the range of $5.20-$5.40 billion compared with the previous guidance of $6.08-$6.22 billion. Adjusted EBITDA for the full year is expected between $1.30-$1.40 billion from the earlier guidance of $1.50-$1.56 billion.
These adjustments consider various factors, including the impact of reduced volumes resulting from the inventory reduction by channel partners. However, it is important to note that the consumption of FMC's products on the ground remains robust and comparable to the previous year, providing a positive indication of ongoing demand.
Despite the challenges faced, the company remains dedicated to effectively managing the situation. The company will leverage cost-saving initiatives, take advantage of improved input costs and implement measures to mitigate operating costs. By doing so, FMC aims to successfully navigate through the market contraction while sustaining strong product consumption levels.
The Zacks Consensus Estimate for ATI’s current-year earnings has been revised 3.7% upward in the past 60 days. ATI beat the Zacks Consensus Estimate in all the last four quarters, with the average earnings surprise being 13%. The company’s shares have rallied 111.3% in the past year.
The Zacks Consensus Estimate for PPG’s current-year earnings has been revised 6.3% upward in the past 90 days. PPG beat the Zacks Consensus Estimate in three of the last four quarters and missed once, with the average earnings surprise being 6.8%. The company’s shares have gained 29.5% in the past year.
The Zacks Consensus Estimate for LIN’s current-year earnings has been revised 0.7% upward in the past 60 days. Linde beat the Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 6.9% on average. The company’s shares have risen roughly 32.8% in the past year.
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FMC Shares Fall on Guidance Cut, Lower Volumes to Hurt Q2
FMC Corporation (FMC - Free Report) provided an update on its second-quarter and full-year 2023 outlook, which has been adjusted due to significant volume declines caused by an unforeseen and unprecedented reduction in inventory by channel partners. This reduction became evident toward the end of May and persisted throughout the quarter in North America, Latin America and EMEA. The company's shares experienced a decline of 11% as a result of the revised guidance.
The stock has lost 11.5% in the past year against the industry’s rise of 13.5% in the same period.
Image Source: Zacks Investment Research
For the second quarter, FMC now expects revenues to range between $1-$1.03 billion, representing a decrease compared with the earlier guidance of $1.42-$1.48 billion. Adjusted EBITDA for the same period is projected in the range of $185-$190 million, indicating a decline from the previous guidance of $350-$370 million.
Looking at the full-year outlook, the company has adjusted its financial expectations to reflect the current market conditions. Revenues are now anticipated in the range of $5.20-$5.40 billion compared with the previous guidance of $6.08-$6.22 billion. Adjusted EBITDA for the full year is expected between $1.30-$1.40 billion from the earlier guidance of $1.50-$1.56 billion.
These adjustments consider various factors, including the impact of reduced volumes resulting from the inventory reduction by channel partners. However, it is important to note that the consumption of FMC's products on the ground remains robust and comparable to the previous year, providing a positive indication of ongoing demand.
Despite the challenges faced, the company remains dedicated to effectively managing the situation. The company will leverage cost-saving initiatives, take advantage of improved input costs and implement measures to mitigate operating costs. By doing so, FMC aims to successfully navigate through the market contraction while sustaining strong product consumption levels.
FMC Corporation Price and Consensus
FMC Corporation price-consensus-chart | FMC Corporation Quote
Zacks Rank & Key Picks
FMC currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the basic materials space include ATI Inc. (ATI - Free Report) and PPG Industries, Inc. (PPG - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) and Linde Plc (LIN - Free Report) , carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for ATI’s current-year earnings has been revised 3.7% upward in the past 60 days. ATI beat the Zacks Consensus Estimate in all the last four quarters, with the average earnings surprise being 13%. The company’s shares have rallied 111.3% in the past year.
The Zacks Consensus Estimate for PPG’s current-year earnings has been revised 6.3% upward in the past 90 days. PPG beat the Zacks Consensus Estimate in three of the last four quarters and missed once, with the average earnings surprise being 6.8%. The company’s shares have gained 29.5% in the past year.
The Zacks Consensus Estimate for LIN’s current-year earnings has been revised 0.7% upward in the past 60 days. Linde beat the Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 6.9% on average. The company’s shares have risen roughly 32.8% in the past year.