Yahoo Finance Why Is FMC (FMC) Up 9% Since Last Earnings Report?
It has been about a month since the last earnings report for FMC (FMC). Shares have added about 9% 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 the most recent earnings report in order to get a better handle on the important catalysts.
FMC Corp's Earnings and Revenues Surpass Estimates in Q3
FMC Corp recorded earnings (as reported) of 95 cents per share in third-quarter 2022, down from $1.24 reported in the year-ago quarter.
Barring one-time items, adjusted earnings per share were $1.23, which topped the Zacks Consensus Estimate of $1.10.
Revenues were $1,377.2 million in the quarter, up around 15% from the year-ago quarter’s levels. The top line surpassed the Zacks Consensus Estimate of $1,342.7 million.
Revenues were driven by a 12% rise in volumes and an 7% contribution from price. The company benefited from a strong start to the Latin American season and pricing actions in all regions.
Regional Sales Performance
Sales climbed 21% year over year in North America in the quarter. Demand in the Midwest on corn and other crops offset softness on the West Coast as a result of challenging weather conditions.
Sales in Latin America rose 35% year over year in the reported quarter on strong herbicide and insecticide demand.
Revenues went down 6% year over year in Asia, impacted by erratic weather conditions in a number of countries including India and Pakistan and currency headwinds.
In EMEA, sales fell 12% year over year in the reported quarter.
Financials
The company had cash and cash equivalents of $363.8 million at the end of the quarter, down roughly 7% year over year. Long-term debt was $2,732.5 million, up around 4% year over year.
Guidance
For 2022, FMC raised its revenue outlook to the range of $5.6-$5.8 billion (from $5.5-$5.7 billion), indicating a rise of 13% at the midpoint from 2021 levels. Sales are expected to be driven by higher volumes and prices in all regions partly offset by foreign currency headwinds.
The company also narrowed adjusted EBITDA guidance to the band of $1.37-$1.43 billion for 2022 (compared with $1.36-$1.44 billion expected earlier), indicating a 7% rise at the midpoint from 2021 levels.
FMC also narrowed adjusted earnings per share forecast for 2022 to the range of $7.10-$7.60 (compared with $7.00-$7.70 expected earlier), suggesting an increase of 7% at the midpoint from the 2021 level.
Free cash flow for 2022 is now projected to be $440-$560 million.
The company also sees fourth-quarter revenues in the range of $1.42-$1.62 billion, reflecting an 8% rise at the midpoint compared with the prior-year quarter’s levels. Adjusted earnings are forecast in the range of $2.05-$2.55 per share, representing a rise of 9% at the midpoint from the prior-year quarter’s levels. It also expects adjusted EBITDA in the range of $395-$455 million for the quarter, representing a rise of 15% at the midpoint from the prior-year quarter’s levels.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -8.52% due to these changes.
VGM Scores
At this time, FMC has a poor Growth Score of F, a grade with the same score on the momentum front. However, 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 F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
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.
Performance of an Industry Player
FMC is part of the Zacks Chemical - Diversified industry. Over the past month, Eastman Chemical (EMN), a stock from the same industry, has gained 14%. The company reported its results for the quarter ended September 2022 more than a month ago.
Eastman Chemical reported revenues of $2.71 billion in the last reported quarter, representing a year-over-year change of -0.4%. EPS of $2.05 for the same period compares with $2.46 a year ago.
Eastman Chemical is expected to post earnings of $1.41 per share for the current quarter, representing a year-over-year change of -22.1%. Over the last 30 days, the Zacks Consensus Estimate has changed -1.7%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #4 (Sell) for Eastman Chemical. Also, the stock has a VGM Score of C.
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