It has been about a month since the last earnings report for FMC (FMC). Shares have added about 0.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is FMC due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
FMC Corp's Earnings and Revenues Surpass Estimates in Q1
FMC Corp recorded earnings (as reported) of $1.40 per share in first-quarter 2021, down from $1.58 reported a year ago.
Barring one-time items, adjusted earnings per share were $1.53, beating the Zacks Consensus Estimate of $1.52.
Revenues were $1,195.6 million for the quarter, down 4% from the year-ago quarter. It, however, surpassed the Zacks Consensus Estimate of $1,170.3 million.
The decline in revenues was due to 4% lower volumes and 1% pricing headwind, partly offset by 1% favorable impact of currencies. The company saw lower sales across EMEA, North America and Latin America, partly offset by gains in Asia.
Regional Sales Performance
Sales dropped 8% year over year in North America in the quarter as a shift of diamide third-party partner sales from North America to Latin America more than offset higher sales for herbicides and a strong launch of Xyway fungicide.
Sales in Latin America slipped 22% year over year in the reported quarter due to currency headwinds, lower cotton planting and the company’s channel inventory management.
In EMEA, sales fell 4% year over year, partly due to discontinued registrations. The company witnessed higher insecticide sales in the quarter.
Revenues climbed 18% year over year in Asia on the back of strong demand for Overwatch herbicide in Australia and higher diamide demand in the region.
The company had cash and cash equivalents of $416.7 million at the end of the quarter, down roughly 4% year over year. Long-term debt was $2,631.4 million, down around 25% year over year.
The company repurchased shares worth $75 million in the first quarter.
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.
Moreover, FMC envisions adjusted EBITDA of $1.32-$1.42 billion for 2021, indicating a 10% rise at the midpoint versus 2020.
The company has raised its adjusted earnings per share forecast for 2021 to the range of $6.70-$7.40 (up from $6.65-$7.35 expected earlier), reflecting an increase of 14% at the midpoint compared with 2020.
Free cash flow for 2021 is projected to be $530-$620 million, indicating a 6% year-over-year increase.
The company also expects to buyback $400-$500 million shares in 2021.
For second-quarter 2021, revenues are projected in the band of $1.19-$1.26 billion, reflecting an increase of 6% at the midpoint compared with the prior-year quarter. Adjusted earnings are forecast in the range of $1.68-$1.88 per share, representing an increase of 3% at the midpoint compared with the prior-year quarter.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
At this time, FMC has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. 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 D. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, FMC has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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