It has been about a month since the last earnings report for FMC (FMC). Shares have lost about 10.5% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is FMC due for a breakout? 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 Top Estimates in Q1, Sales Lag
FMC Corp recorded earnings (as reported) of $1.55 per share in first-quarter 2023, down from $1.64 reported in the year-ago quarter.
Barring one-time items, adjusted earnings per share were $1.77, which topped the Zacks Consensus Estimate of $1.73.
Revenues were $1,344.3 million in the quarter, down around 0.5% from the year-ago quarter’s levels. The top line missed the Zacks Consensus Estimate of $1,424.3 million.
A 7% contribution from price was partly offset by 3% lower volumes and a 4% headwind from currency swings. The company benefited from strong pricing actions, growth of new products, expanded market access and cost discipline in the quarter.
Regional Sales Performance
Sales climbed 28% year over year in North America in the quarter on higher sales of new products, expanded market access and pricing gains.
Sales in Latin America fell 12% year over year in the reported quarter, hurt by drought conditions.
Revenues were down 22% year over year in Asia in the quarter. The downside was due to dry conditions in Australia and active management of high channel inventory in India.
In EMEA, sales fell 4% year over year in the reported quarter as weaker volumes in herbicides, registration losses and the loss of sales in Russia were mostly offset by strong pricing actions.
The company had cash and cash equivalents of $494.4 million at the end of the quarter, down roughly 4% year over year. Long-term debt was $2,334 million, down around 15% year over year.
For 2023, FMC continues to see revenues in the range of $6.08-$6.22 billion, indicating a rise of 6% at the midpoint from 2022 levels.
The company raised its adjusted EBITDA guidance to the band of $1.50-$1.56 billion from $1.48-$1.56 billion expected earlier, indicating a 9% year-over-year rise at the midpoint.
FMC also now projects adjusted earnings per share for 2023 in the range of $7.34-$7.94, suggesting an increase of 3% at the midpoint from the 2022 level.
Free cash flow for 2023 is projected to be $530-$720 million.
The company also sees second-quarter 2023 revenues in the range of $1.42-$1.48 billion, flat at the midpoint compared with the prior-year quarter’s levels. Adjusted earnings are forecast in the range of $1.66-$1.86 per share, representing a decline of 9% at the midpoint from the prior-year quarter’s levels. It also expects adjusted EBITDA in the range of $350-$370 million for the quarter, flat 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 -9.37% due to these changes.
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 B on the value side, putting it in the top 40% 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.
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.
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