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FMC Corp's (FMC) Q1 Earnings, Revenues Lag Estimates

FMC Corp.FMC swung to a loss (on a reported basis) of $124 million or 92 cents per share in first-quarter 2017 from a profit of $48 million or 36 cents per share a year ago.

Barring one-time items, earnings came in at 43 cents per share in the quarter, missing the Zacks Consensus Estimate of 56 cents.

The chemical maker's revenues fell roughly 2% year over year to $596 million in the reported quarter. Sales also missed the Zacks Consensus Estimate of $743 million.

The results from the company's Health & Nutrition segment have been reported as discontinued operations. The company's adjusted earnings for the first quarter exclude around 21 cents attributable to the reporting of the Health & Nutrition unit in discontinued operations. Revenues for the quarter also exclude $177 million attributable to Health & Nutrition.

FMC Corporation Price, Consensus and EPS Surprise

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

Segment Review

Revenues from the Agricultural Solutions division fell around 3% year over year to $530 million in the reported quarter as reduced sales across Latin America and Europe more than offset gains in Asia and North America. Segment profits were $83 million, up 1% year over year, supported by better product mix and favorable currency impact.

Revenues from the Lithium unit went up 9% to $66 million. Segment earnings surged 45% year over year to $22 million, aided by higher prices and better mix.

Balance Sheet

FMC Corp. ended the quarter with cash and cash equivalents of $96.1 million, up around 50% year over year. Long-term debt was $1,790.4 million, down around 10% year over year.

Outlook

FMC Corp. sees adjusted earnings in the band of $2.20 to $2.60 per share for 2017.

FMC Corp., in Mar 2017, agreed to buy a significant portion of DuPont's DD Crop Protection business. Under the deal terms, FMC Corp. will buy DuPont's Cereal Broadleaf Herbicides and Chewing Insecticides portfolios as well as some of the latter's Crop Protection research and development pipeline and organization. The acquisition will significantly increase FMC Corp.'s presence in Asia and Europe. As part of the deal, DuPont will also purchase FMC's Health & Nutrition business.

The deal is expected to complete in the fourth quarter of 2017. FMC Corp.'s adjusted earnings outlook for 2017 exclude any benefit from the proposed DuPont transaction.

For the Agricultural Solutions unit, FMC Corp. continues to expect revenues in the range of $2.2−$2.4 billion for 2017. Segment earnings for the year are expected to be in the band of $410 million to $450 million. Earnings for second-quarter 2017 have been projected in the range of $80−$100 million, reflecting a decrease of around 11% at the mid-point compared with the prior year quarter.

FMC Corp. now sees revenues in the range of $325−$365 million (up from $315−$355 million expected earlier) for the Lithium unit for 2017. Segment earnings are forecast to be in the band of $100−$120 million (up from $90−$110 million expected earlier) for the full year. For the second quarter, earnings are expected to be in the range of $19−$23 million, reflecting an increase of around 27% at the mid-point compared with the prior year quarter.

The company has excluded its Health & Nutrition unit from its second-quarter and full-year 2017 guidance.

Price Performance

FMC Corp. has outperformed the Zacks categorized Chemicals-Diversified industry over a year. The company's shares have gained 55.5% over this period compared with the industry's gain of 18.5% over the same period.

Zacks Rank & Key Picks

FMC Corp. is a Zacks Rank #2 (Buy) stock.

Other well-placed companies in the chemical space include The Chemours Company CC and Kronos Worldwide, Inc. KRO , both holding a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.

Chemours has an expected long-term growth of 15.5%.

Kronos has an expected long-term growth of 5%.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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