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FMC Corp (FMC) Earnings Beat in Q3, Raises FY17 Outlook

Zacks Equity Research
Updated

FMC Corporation FMC posted earnings of $55 million or 41 cents per share in third-quarter 2017, down roughly 31% from $80 million or 59 cents a year ago.

Barring one-time items, earnings came in at 70 cents per share in the quarter, exceeding the Zacks Consensus Estimate of 63 cents.

The chemical maker’s revenues rose roughly 3% year over year to $646 million in the reported quarter. The figure however, trailed the Zacks Consensus Estimate of $690 million.

FMC Corporation Price, Consensus and EPS Surprise

 

FMC Corporation Price, Consensus and EPS Surprise | FMC Corporation Quote

 

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Segment Review

Revenues from the Agricultural Solutions division fell around 1.3% year over year to $551.8 million in the quarter. The company’s actions in India to prepare for the integration of various market access channels between FMC and acquired business reduced revenues of Agricultural Solutions unit by 7%. Segment earnings were $118.4 million, up 31.4% year over year, mainly driven by volume growth and lower costs.

Revenues from the Lithium unit went up 35.1% year over year to $94.4 million. Segment earnings surged 110.3%% year over year to $36.8 million, aided by higher volume from the company’s new hydroxide operations in China and higher year-over-year prices.

Balance Sheet

FMC Corp. ended the quarter with cash and cash equivalents of $93.8 million, down around 28.2% year over year.

Long-term debt was $1,492.9 million, down around 22% year over year.

Outlook

FMC Corp. now sees adjusted earnings in the band of $2.59 to $2.69 per share for 2017 (up from the prior view of $2.30 to $2.50 per share), which includes the impact of two months contribution from the DuPont Crop Protection acquisition.

For the Agricultural Solutions unit, FMC Corp. expects revenues in the range of $2.5-$2.6 billion for 2017. Segment earnings for the year are expected to be in the band of $465 million to $485 million. Earnings for fourth-quarter 2017 have been projected in the range of $168-$188 million.

FMC Corp. expects revenues in the range of $340-$360 million for the Lithium unit for 2017, which remains unchanged from previous guidance. However, segment earnings are forecasted to be in the band of $124 to $128 million (up from $115 to $125 million expected earlier) for the full year. For the fourth quarter, earnings are expected to be in the range of $41-$45 million, reflecting doubling of earnings compared to year-ago quarter.

Price Performance

Shares of FMC Corp. have moved up 24.8% in last six months, outperforming the 16.2% growth recorded by its industry.

 



 

Zacks Rank & Other Stocks to Consider

FMC Corp. currently sports a Zacks Rank #1 (Strong Buy).

Some other top-ranked stocks in the basic materials space are Sociedad Quimica y Minera S.A. SQM, WestRock Company WRK and Westlake Chemical Corporation WLK. All three stocks flaunt a Zacks Rank #1. You can see the complete list of today’s Zacks Rank #1 stocks here.

Sociedad Quimica has an expected long-term earnings growth rate of 32.5%.

WestRock has an expected long-term earnings growth rate of 7.5%.

Westlake Chemical has an expected long-term earnings growth rate of 8.4%.

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