FMC Corp (FMC) Earnings and Revenues Surpass Estimates in Q2

FMC Corporation FMC recorded earnings (as reported) of $1.56 per share in second-quarter 2021, up 11% from $1.41 reported a year ago.

Barring one-time items, adjusted earnings per share were $1.81, ahead of the Zacks Consensus Estimate of $1.77.

Revenues were $1,242 million for the quarter, up around 8% from the year-ago quarter. It surpassed the Zacks Consensus Estimate of $1,228 million.

Revenues were driven by a 4% rise in volumes and 4% favorable impact of currencies. The company saw strong volume growth in all regions outside of EMEA (Europe, Middle East, and Africa) on the back of strong underlying business and contribution of new product launches.

FMC Corporation Price, Consensus and EPS Surprise

FMC Corporation Price, Consensus and EPS SurpriseFMC Corporation Price, Consensus and EPS Surprise
FMC Corporation Price, Consensus and EPS Surprise

FMC Corporation price-consensus-eps-surprise-chart | FMC Corporation Quote

Regional Sales Performance

Sales dropped 7% year over year in North America in the quarter, impacted by a shift in volume demand by geography from the company’s global diamide partnerships.

Sales in Latin America went up 15% year over year in the reported quarter on strong demand for insecticide and fungicide, aided by favorable commodity prices, and favorable currency swings.

In EMEA, sales rose 3% year over year as higher demand for diamides and herbicides and favorable currency swings were offset by the impacts of unfavorable weather and discontinued registrations.

Revenues climbed 20% year over year in Asia on the back of strength in the insecticide portfolio, especially in India and Australia, and favorable impact of currencies.

Financials

The company had cash and cash equivalents of $728.5 million at the end of the quarter, up roughly 113% year over year. Long-term debt was $2,630.8 million, down around 13% year over year.

The company repurchased shares worth $25 million in the second quarter.

Guidance

For 2021, FMC continues to expect revenues to be between $4.9 billion and $5.1 billion, indicating a rise of 8% at the midpoint versus 2020. The growth is expected to be driven mainly by volumes and price increases.

The company now envisions adjusted EBITDA of $1.29-$1.35 billion (down from earlier view of $1.32-$1.42 billion) for 2021, indicating a 6% rise at the midpoint versus 2020. The revision reflects continued increase in raw materials, packaging and logistics costs.

Moreover, FMC now expects adjusted earnings per share for 2021 in the range of $6.54 to $6.94 (down from $6.70-$7.40 expected earlier), reflecting an increase of 9% at the midpoint compared with 2020.

Free cash flow for 2021 is now projected to be $480-$570 million, indicating a 4% year-over-year decline.

The company also expects to buyback $350-$450 million shares in 2021.

For third-quarter 2021, revenues are projected in the band of $1.13-$1.22 billion, reflecting an increase of 8% at the midpoint compared with the prior-year quarter. Adjusted earnings are forecast in the range of $1.23-$1.39 per share, representing an increase of 7% at the midpoint compared with the prior-year quarter.

Price Performance

FMC’s shares are down 0.7% over a year against the industry’s 37% rise

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Zacks Rank & Key Picks

FMC currently carries a Zacks Rank #4 (Sell).

Better-ranked stocks worth considering in the basic materials space include Nucor Corporation NUE, ArcelorMittal MT and Cabot Corporation CBT, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Nucor has a projected earnings growth rate of 444.9% for the current year. The company’s shares have surged around 148% in a year.

ArcelorMittal has an expected earnings growth rate of 1,635.1% for the current year. The company’s shares have shot up around 206% in the past year.

Cabot has an expected earnings growth rate of around 137.5% for the current fiscal. The company’s shares have gained roughly 47% in the past year.

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By Matt Earle

Matthew Earle is the Founder of MiningFeeds. In 2005, Matt founded MiningNerds.com to provide data and information to the mining investment community. This site was merged with Highgrade Review to form MiningFeeds. Matt has a B.Sc. degree with a minor in geology from the University of Toronto.

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