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FMC Corp (FMC) Tops Q3 Earnings Estimates, Ups FY19 View

Zacks Equity Research

FMC Corporation FMC recorded earnings (as reported) of 69 cents per share in third-quarter 2019, up from 54 cents per share a year ago.  

Barring one-time items, adjusted earnings per share came in at 94 cents, topping the Zacks Consensus Estimate of 80 cents. The results were supported by strong operating performance.

Revenues were $1,014.3 million for the quarter, up around 10% from the recast figure for the year-ago quarter. It also surpassed the Zacks Consensus Estimate of $975.7 million. Revenues were aided by double-digit organic sales growth across Brazil, Argentina, Mexico, France, India, China and Pakistan.

Revenue growth was supported by 8% contribution from volume along with 4% contribution from price, which was partly offset by a 2% unfavorable impact of foreign currencies. The company achieved higher pricing in all regions in the reported quarter.

Regional Sales Performance

Sales in Latin America climbed 21% year over year and 22% excluding foreign exchange. This was mainly driven by strong sales growth in cotton and sugarcane applications in Brazil, and soybeans in Argentina.

Sales fell 3% year over year in North America, hurt by reduced demand for herbicides in the Midwest and Canada that more than offset strength in diamides and specialty crops.        

In EMEA, sales expanded 4% year over year (8% excluding foreign exchange). This was driven by strong contributions from new product introductions, particularly in France.

Revenues rose 5% year over year (9% excluding foreign exchange) in Asia. Sales rose by double-digits on an organic basis across India, China and Pakistan.

Balance Sheet

The company had cash and cash equivalents of $419.7 million at the end of the third quarter. Long-term debt was $3,032.4 million at the end of the quarter.

Guidance

The company has raised its revenue and earnings guidance for 2019. For the full year, FMC now sees revenues to be between $4.58 billion and $4.62 billion (up from $4.5 billion and $4.6 billion), indicating a rise of 7% at the midpoint versus recast 2018.

The company also raised its adjusted earnings per share forecast to the range of $5.80-$5.90 from its earlier view of $5.68-$5.88. The revised guidance reflects an increase of 12% at the midpoint compared with recast 2018.

For fourth-quarter 2019, revenues are projected in the band of $1.17-$1.21 billion, indicating 8% growth at the midpoint compared with recast fourth-quarter 2018. Adjusted earnings are forecast to be in the range of $1.46-$1.56 per share, indicating 3% growth at the midpoint compared with recast fourth-quarter 2018 figure.

Zacks Rank & Key Picks

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

Better-ranked stocks worth a look in the basic materials space include Agnico Eagle Mines Limited AEM, Kinross Gold Corporation KGC and Franco-Nevada Corporation FNV, all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Agnico Eagle has a projected earnings growth rate of 168.6% for the current year. The company’s shares have rallied 68% in a year’s time.

Kinross has projected earnings growth rate of 210% for the current year. The company’s shares have surged around 84% in a year’s time.

Franco-Nevada has estimated earnings growth rate of 39.3% for the current year. The company’s shares have gained roughly 52% in a year’s time.

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