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FMC Corp Issues Update on Liquidity, Expects Strong Q1 Results

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FMC Corporation (FMC - Free Report) announced the amendment of its credit agreement and term-loan facility, which will maximize the leverage ratio permitted under each arrangement. The company stated that the maximum leverage ratio will increase to 4.25 through the period ending Dec 31, 2020.

FMC Corp believes that it will be prudent to boost the maximum leverage ratio permissible under its credit facilities under current economic conditions. Higher leverage ratio is likely to provide support under various scenarios amid the coronavirus pandemic.

The company noted that preliminary sales for the first quarter of 2020 showed a rise of roughly 5% year over year. Further, adjusted EBITDA and adjusted earnings are expected at the midpoint of the first quarter guidance of $356 million and $1.81 per share, respectively.

Per FMC Corp, demand in the first quarter was strong but the pandemic impacted supply chain and logistics. The company is expected to discuss its views in detail in first-quarter release on May 5, after the closing bell.

Shares of FMC Corp have lost 15.7% year to date compared with the industry’s 33.5% decline.



FMC Corp is focused on boosting its market position and strengthening product portfolio. It is investing in technologies and products as well as new launches to enhance value to the farmers. Product introductions are expected to support its results in this year.

However, the company is exposed to challenges from higher raw material costs, partly due to supply disruptions in China amid the outbreak. It also faces headwind from higher tariffs.

Zacks Rank & Key Picks

FMC Corp currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space are Newmont Corporation (NEM - Free Report) , Franco-Nevada Corporation (FNV - Free Report) and Novagold Resources Inc. (NG - Free Report) . While Newmont sports a Zacks Rank #1 (Strong Buy), Franco-Nevada and Novagold carry Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Newmont has an expected earnings growth rate of 90.2% for 2020. The company’s shares have surged 91.8% in the past year.

Franco-Nevada has an expected earnings growth rate of 18.1% for 2020. Its shares have returned 87.9% in the past year.   

Novagold has an expected earnings growth rate of 11.1% for fiscal 2020. The company’s shares have soared 199.9% in the past year.

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