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FMC's Q2 Earnings and Sales Fall Short of Expectations
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FMC Corporation (FMC - Free Report) recorded earnings of 24 cents per share in second-quarter 2023, down from $1.06 reported in the year-ago quarter.
Barring one-time items, adjusted earnings per share were 50 cents, which missed the Zacks Consensus Estimate of 59 cents.
Revenues were $1,014.5 million in the quarter, down around 30% from the year-ago quarter’s levels. The top line missed the Zacks Consensus Estimate of $1,019.1 million.
A 3% contribution from price was partly offset by 31% lower volumes and a 2% headwind from currency swings.
FMC's second-quarter results were impacted by volume declines due to active inventory management by farmers. However, demand for its innovative products showed resilience in the quarter.
Sales dropped 25% year over year in North America to $273 million in the quarter as partners, the distribution channel and growers reduced inventory. Sales missed our estimate of $288.2 million.
Sales in Latin America fell 38% year over year to $269 million in the reported quarter, hurt by drought conditions and lower volumes. Sales beat our estimate of $268.2 million.
Revenues were down 29% year over year in Asia in the quarter to $266 million. The downside was due to the active management of high channel inventory in India and difficult growing conditions in most of the country. It beat our estimate of $265.7 million.
In EMEA, sales fell 26% year over year to $208 million in the reported quarter, primarily attributed to adverse weather conditions across Europe and grower destocking. Despite these challenges, the region managed to partially offset volume headwinds with strong pricing gains. It beat our estimate of $204 million.
Financials
The company had cash and cash equivalents of $941.5 million at the end of the quarter, up roughly 59% year over year. Long-term debt was $3,022 million, up around 10.5% year over year.
The company returned around $123 million to its shareholders during the quarter.
Guidance
For 2023, FMC expects revenues in the range of $5.20-$5.40 billion, indicating a decline of 9% at the midpoint from 2022 levels. The company expects adjusted EBITDA in the band of $1.30-$1.40 billion, indicating a 4% year-over-year decline at the midpoint. FMC now projects adjusted earnings per share for 2023 in the range of $5.86-$6.80, suggesting a decrease of 15% at the midpoint from the 2022 level.
The company sees third-quarter revenues in the range of $1.19-$1.27 billion, indicating an 11% decline at the midpoint from the prior-year levels. Adjusted earnings are forecast in the range of 90 cents-$1.32 per share, indicating a decline of 10% at the midpoint from the prior-year quarter’s levels. It also expects adjusted EBITDA in the range of $240-$290 million for the quarter, a 2% increase at the midpoint from the prior-year quarter’s levels.
The company expects fourth-quarter revenues to be in the range of $1.66-$1.78 billion, indicating a 6% increase at the midpoint compared to the previous year. The company also predicts growth in adjusted EBITDA for the fourth quarter, ranging from $511-$561 million. This represents a 24% increase at the midpoint when compared to the same period in 2022. Adjusted EPS is forecast in the range of $2.71-$3.17 per share, indicating a 24% increase from earnings reported in the fourth quarter of 2022.
The company sees second-half 2023 revenues in the range of $2.84-$3.04 billion, a 2% decrease at the midpoint compared with the prior-year levels. Adjusted EBITDA is forecast in the range of $751-$851 million, a 16% rise from at midpoint compared to the prior year.
Price Performance
FMC’s shares have lost 14.9% in the past year against a 13.6% rise of the industry.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
FMC currently carries a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks in the Basic Materials space include Livent Corporation and Carpenter Technology Corporation (CRS - Free Report) , both sporting a Zacks Rank #1 (Strong Buy), and PPG Industries, Inc. (PPG - 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 LTHM’s current-year earnings has been revised 14% upward in the past 90 days. LTHM beat the Zacks Consensus Estimate in each of the last four quarters, with the average earnings surprise being 22%.
The earnings estimate for CRS’s current year is pegged at $1.04, indicating year-over-year growth of 198%. CRS beat the Zacks Consensus Estimate in all the last four quarters, with the average earnings surprise being 30.9%. The company’s shares have rallied 76.6% in the past year.
The Zacks Consensus Estimate for PPG’s current-year earnings has been revised 6.8% upward in the past 60 days. PPG beat the Zacks Consensus Estimate in three of the last four quarters. It delivered a trailing four-quarter earnings surprise of 7.3% on average. The company’s shares have risen roughly 10.6% in the past year.
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FMC's Q2 Earnings and Sales Fall Short of Expectations
FMC Corporation (FMC - Free Report) recorded earnings of 24 cents per share in second-quarter 2023, down from $1.06 reported in the year-ago quarter.
Barring one-time items, adjusted earnings per share were 50 cents, which missed the Zacks Consensus Estimate of 59 cents.
Revenues were $1,014.5 million in the quarter, down around 30% from the year-ago quarter’s levels. The top line missed the Zacks Consensus Estimate of $1,019.1 million.
A 3% contribution from price was partly offset by 31% lower volumes and a 2% headwind from currency swings.
FMC's second-quarter results were impacted by volume declines due to active inventory management by farmers. However, demand for its innovative products showed resilience in the quarter.
FMC Corporation Price, Consensus and EPS Surprise
FMC Corporation price-consensus-eps-surprise-chart | FMC Corporation Quote
Regional Sales Performance
Sales dropped 25% year over year in North America to $273 million in the quarter as partners, the distribution channel and growers reduced inventory. Sales missed our estimate of $288.2 million.
Sales in Latin America fell 38% year over year to $269 million in the reported quarter, hurt by drought conditions and lower volumes. Sales beat our estimate of $268.2 million.
Revenues were down 29% year over year in Asia in the quarter to $266 million. The downside was due to the active management of high channel inventory in India and difficult growing conditions in most of the country. It beat our estimate of $265.7 million.
In EMEA, sales fell 26% year over year to $208 million in the reported quarter, primarily attributed to adverse weather conditions across Europe and grower destocking. Despite these challenges, the region managed to partially offset volume headwinds with strong pricing gains. It beat our estimate of $204 million.
Financials
The company had cash and cash equivalents of $941.5 million at the end of the quarter, up roughly 59% year over year. Long-term debt was $3,022 million, up around 10.5% year over year.
The company returned around $123 million to its shareholders during the quarter.
Guidance
For 2023, FMC expects revenues in the range of $5.20-$5.40 billion, indicating a decline of 9% at the midpoint from 2022 levels. The company expects adjusted EBITDA in the band of $1.30-$1.40 billion, indicating a 4% year-over-year decline at the midpoint. FMC now projects adjusted earnings per share for 2023 in the range of $5.86-$6.80, suggesting a decrease of 15% at the midpoint from the 2022 level.
The company sees third-quarter revenues in the range of $1.19-$1.27 billion, indicating an 11% decline at the midpoint from the prior-year levels. Adjusted earnings are forecast in the range of 90 cents-$1.32 per share, indicating a decline of 10% at the midpoint from the prior-year quarter’s levels. It also expects adjusted EBITDA in the range of $240-$290 million for the quarter, a 2% increase at the midpoint from the prior-year quarter’s levels.
The company expects fourth-quarter revenues to be in the range of $1.66-$1.78 billion, indicating a 6% increase at the midpoint compared to the previous year. The company also predicts growth in adjusted EBITDA for the fourth quarter, ranging from $511-$561 million. This represents a 24% increase at the midpoint when compared to the same period in 2022. Adjusted EPS is forecast in the range of $2.71-$3.17 per share, indicating a 24% increase from earnings reported in the fourth quarter of 2022.
The company sees second-half 2023 revenues in the range of $2.84-$3.04 billion, a 2% decrease at the midpoint compared with the prior-year levels. Adjusted EBITDA is forecast in the range of $751-$851 million, a 16% rise from at midpoint compared to the prior year.
Price Performance
FMC’s shares have lost 14.9% in the past year against a 13.6% rise of the industry.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
FMC currently carries a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks in the Basic Materials space include Livent Corporation and Carpenter Technology Corporation (CRS - Free Report) , both sporting a Zacks Rank #1 (Strong Buy), and PPG Industries, Inc. (PPG - 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 LTHM’s current-year earnings has been revised 14% upward in the past 90 days. LTHM beat the Zacks Consensus Estimate in each of the last four quarters, with the average earnings surprise being 22%.
The earnings estimate for CRS’s current year is pegged at $1.04, indicating year-over-year growth of 198%. CRS beat the Zacks Consensus Estimate in all the last four quarters, with the average earnings surprise being 30.9%. The company’s shares have rallied 76.6% in the past year.
The Zacks Consensus Estimate for PPG’s current-year earnings has been revised 6.8% upward in the past 60 days. PPG beat the Zacks Consensus Estimate in three of the last four quarters. It delivered a trailing four-quarter earnings surprise of 7.3% on average. The company’s shares have risen roughly 10.6% in the past year.