Shares of FMC Corporation (FMC - Free Report) have rallied around 22% over the last three months. The company has also significantly outperformed its industry’s gain of 9.3% to over the same time frame.
FMC Corp. has a market cap of roughly $12.4 billion and average volume of shares traded in the last three months is around 1,578.7K. The company has an expected long-term earnings per share growth of around 11.3%.
Let’s take a look into the factors that are driving this chemical maker’s stock.
Strong second-quarter results and upbeat prospects for the Lithium unit have provided a boost to the company’s shares. FMC Corp. posted solid second-quarter results last month. Its profits rose around 15% year over year to $75 million or 56 cents per share in the quarter. Adjusted earnings of 48 cents per share beat the Zacks Consensus Estimate of 47 cents. Revenues rose roughly 7% year over year to $657 million, also topping the Zacks Consensus Estimate of $612 million.
FMC Corp. is benefiting from its strategic investments, acquisitions and efforts to expand its market position and strengthen its portfolio. The company is investing in technologies in its agriculture business and launching new products with a goal to enhance value to farmers.
FMC Corp. is also witnessing strong momentum in its Lithium unit. The company is expanding its lithium hydroxide production capacity. It is executing this expansion in three phases. The move is based on the growing demand for electric vehicles. The company expects its lithium business to deliver strong earnings growth in 2017.
FMC Corp., in August, raised its outlook for the Lithium unit for 2017. The company now sees revenues in the range of $340-$360 million (up from $325-$365 million expected earlier) for the unit. Segment earnings are forecast to be in the band of $115 to $125 million (up from $100 to $120 million expected earlier) for the year.
The planned acquisition of a major portion of DuPont's Crop Protection business has also provided a significant growth platform for FMC’s Agricultural Solutions unit. After deal closure, FMC Corp.’s Agricultural Solutions unit will become the fifth biggest crop protection chemical company in the world by sales with estimated annual revenues of around $3.8 billion. The acquisition will significantly increase the company’s presence in Asia and Europe and will be immediately accretive to its adjusted earnings per share.
FMC Corp. is a Zacks Rank #3 (Hold) stock.
Stocks to Consider
Better-ranked stocks in the basic materials space include Kraton Corporation (KRA - Free Report) , Kronos Worldwide, Inc. (KRO - Free Report) and Orion Engineered Carbons, S.A. (OEC - Free Report) , all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Kraton has expected earnings growth of 7.2% for the current year.
Kronos has expected long-term earnings growth of 5%.
Orion Engineered Carbons has expected earnings growth of 19% for the current year.
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