FMC Corporation FMC will release results for the second quarter of 2024 after the closing bell on Jul 31.
The company beat the Zacks Consensus Estimate for earnings in one of the last four quarters while missing in the other three. On average, FMC has a negative trailing four-quarter earnings surprise of around 4.1%. The company reported an earnings surprise of around 2.9% in the last reported quarter.
FMC's second-quarter financial performance will likely face challenges due to inventory de-stocking by growers in the distribution channel. Despite this headwind, the company's cost actions and new product launches are expected to have contributed to its performance.
FMC’s shares have plunged 38.1% in the past year against a 12% fall in the industry.
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What Do the Estimates Say?
The Zacks Consensus Estimate for second-quarter sales for FMC is currently pegged at $995.3 million, suggesting a 1.9% year-over-year fall.
The consensus estimate for North America’s revenues is currently pegged at $282.2 million, suggesting a 3% year-over-year rise.
The Zacks Consensus Estimate for Latin America sales is pegged at $272.7 million, indicating a 1% year-over-year rise.
The consensus estimates for Europe, the Middle East and Africa (EMEA) sales are pegged at $214.9 million, calling for a 3% year-over-year rise.
The same for Asia is pegged at $228.9 million, indicating a 14% decline on a year-over-year basis.
Some Factors at Play
FMC is grappling with challenges stemming from inventory de-stocking. Aggressive de-stocking by growers in the distribution channel, driven by lower fertilizer and non-selective herbicide prices, along with higher interest rates increasing the carrying cost of inventory, is affecting its volumes.
FMC experienced a 27% decline in volumes, impacting revenues in the first quarter. Sales were dented by inventory management actions across all regions. This trend is expected to have persisted into the quarter to be reported, particularly in Asia, though to a lesser extent than in the first quarter. High channel inventory in India is projected to be a headwind throughout 2024.
Despite these challenges, FMC is committed to strengthening its product portfolio by investing in new technologies and launching new products, which are gaining significant traction in Europe, North America and Asia. These initiatives are expected to have supported the company's results in the June quarter.
Additionally, the company is likely to have benefited from reduced input costs, lower interest expenses, a favorable product mix and cost-control measures. FMC experienced lower input costs in first-quarter 2024 and anticipates that its restructuring actions, including cuts in indirect spending and workforce reductions, will yield $50-$75 million in cost savings in 2024. These measures are expected to have contributed to its EBITDA growth.
Zacks Model
Our proven model does not predict an earnings beat for FMC this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earning beat.
Earnings ESP: Earnings ESP for FMC is -0.60%. The Zacks Consensus Estimate for the second quarter is currently pegged at 50 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: FMC currently carries a Zacks Rank #4 (Sell).
FMC Corporation Price and EPS Surprise
FMC Corporation price-eps-surprise | FMC Corporation Quote
Stocks That Warrant a Look
Here are some companies in the basic materials space you may want to consider, as our model shows these have the right combination of elements to post earnings beat this quarter:
Hecla Mining Company HL, which is slated to release its earnings on Aug 6, has an Earnings ESP of +50.00% and a Zacks Rank #1 at present. You can see the complete list of today’s Zacks Rank #1 stocks here.
The consensus estimate for HL’s second-quarter earnings is currently pegged at a penny per share.
Agnico Eagle Mines Limited AEM, slated to release earnings on July 31, has an Earnings ESP of +4.86% and carries a Zacks Rank #2 at present.
The Zacks Consensus Estimate for AEM’s second-quarter earnings is pegged at 89 cents.
Axalta Coating Systems Ltd. AXTA, expected to release earnings on Aug 1, has an Earnings ESP of +0.01% and carries a Zacks Rank #3 at present.
The consensus mark for AXTA’s second-quarter earnings is currently pegged at 51 cents.
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