It has been about a month since the last earnings report for FMC (FMC - Free Report) . Shares have lost about 1.7% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is FMC due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
FMC Corp Tops Earnings & Revenue Estimates in Q2
FMC Corp saw its profits (as reported) surge roughly 74% to $129.7 million or 96 cents per share in second-quarter 2018 from $74.7 million or 56 cents per share it earned a year ago.
Barring one-time items, adjusted earnings came in at $1.78 per share in the quarter, exceeding the Zacks Consensus Estimate of $1.71.
The company's revenues jumped roughly 92% year over year to $1,262.3 million. It also surpassed the Zacks Consensus Estimate of $1,228.7 million.
The company gained from strong demand for the acquired products in its Agricultural Solutions segment. Moreover, its lithium unit delivered strong results in the quarter on the back of higher volumes and prices across all major product categories.
Revenues from the Agricultural Solutions division jumped 98% year over year to $1.2 billion in the reported quarter, driven by the DuPont asset buyout. Segment EBITDA surged three-fold year over year to $344 million.
Revenues from the Lithium unit shot up 46% year over year to $108 million. Segment EBITDA jumped 85% to $51 million. The results were driven by higher realized prices and volumes across key product categories.
FMC Corp ended the quarter with cash and cash equivalents of $326.4 million, a nearly three-fold year-over-year rise. Long-term debt rose around 82% year over year to $2,892.9 million.
For 2018, FMC Corp backed its adjusted earnings expectations in the band of $5.90 to $6.20 per share, a year over year increase of 123%.
For third-quarter 2018, the company expects adjusted earnings in the range of 87-97 cents per share. FMC Corp also envisions adjusted earnings per share in the range of $1.41 to $1.61 for the fourth quarter.
For the Agricultural Solutions unit, FMC Corp sees revenues for 2018 in the range of $4.1 billion to $4.3 billion. It also expects segment EBITDA for the full year in the band of $1.17 billion to $1.23 billion. For the third quarter, segment EBITDA has been forecast in the range of $195 million to $215 million.
Moreover, FMC Corp expects revenues in the range of $430 million to $460 million for the Lithium unit for 2018. It also raised the full-year outlook for segment EBITDA by $2 million to a range of $195 million to $205 million. For the third quarter, segment EBITDA has been forecast in the range of $45 million to $49 million. The company also stated that the plan to separate listing of the Lithium unit in October this year remains on track. This will be followed by a spinoff within 6 months.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month. The consensus estimate has shifted -25.78% due to these changes.
At this time, FMC has a nice Growth Score of B, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, FMC has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.