FMC Corporation FMC is set to release third-quarter 2024 results after the closing bell on Oct. 29.
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The company beat the Zacks Consensus Estimate for earnings in two of the last four quarters and missed twice. On average, FMC has a trailing four-quarter earnings surprise of around 6.2%. The company reported an earnings surprise of 26% in the last reported quarter.
FMC is likely to have faced challenges from pricing pressure and significant unabsorbed fixed costs in the third quarter. The company's cost actions and new product launches are expected to have contributed to its performance.
FMC’s shares have gained 11.2% in the past year compared with the Zacks Chemicals Diversified industry’s 9.8% rise.
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Let’s see how things are shaping up for this announcement.
What Do FMC’s Revenue Estimates Say?
The Zacks Consensus Estimate for third-quarter sales for FMC is currently pegged at $1,035.2 million, suggesting a 5.4% year-over-year rise.
The consensus estimate for North America’s revenues is currently pegged at $205.9 million, suggesting a 29% year-over-year rise.
The Zacks Consensus Estimate for Latin America sales is pegged at $484.2 million, indicating a 3.9% year-over-year rise.
The consensus estimates for Europe, the Middle East and Africa (EMEA) sales are pegged at $155.5 million, calling for a 4.4% year-over-year rise.
The same for Asia is pinned at $174.7 million, indicating a 15.7% decline on a year-over-year basis.
Factors at Play for FMC Stock
FMC is exposed to headwinds from pricing pressure in all regions. In the second quarter of 2024, a 14% year-over-year increase in volumes on the back of improved demand was offset by a 10% decline in prices. Lower prices were partly driven by competitive pressure due to demand recovery and strategic pricing on less differentiated products. The pricing pressure is expected to have continued in the third quarter.
Factoring in the slower demand recovery and pricing headwinds, FMC updated its revenue outlook for full-year 2024 and now sees revenues between $4.30 billion and $4.50 billion, indicating a 2% decline at the midpoint compared to 2023. The revised guidance is 4% lower at the midpoint versus its earlier guidance. While the company is seeing a return of demand in most regions, the recovery has been slower than what it had originally expected.
FMC also faces challenges from significant unobserved fixed costs, which are expected to have weighed on its profits in the quarter to be reported. It faces headwinds from a higher cost of goods sold (COGS) in the in the third quarter. It expects COGS headwinds of roughly $40 million in the third quarter mainly related to unabsorbed fixed costs associated with reduced manufacturing activities. Cost headwinds are expected to have impacted FMC’s EBITDA in the third quarter.
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 September quarter. FMC is seeing strong gains in new products including Coragen eVo and Premio Star insecticides and the Onsuva fungicide in Latin America. It expects a significant amount of volume growth to come from new products in the second half of 2024.
FMC is also expected to have benefited from reduced input costs, a favorable product mix and cost-control actions. It is also making progress with its global restructuring and cost-reduction program. The benefits from restructuring actions are expected to reflect on its EBITDA in the quarter to be reported.
FMC Corporation Price and EPS Surprise
FMC Corporation price-eps-surprise | FMC Corporation Quote
What Our Model Unveils for FMC
Our proven model does not conclusively predict an earnings beat for FMC this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here.
Earnings ESP: Earnings ESP for FMC is -1.69%. The Zacks Consensus Estimate for earnings for the third quarter is currently pegged at 49 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).
Basic Materials Stocks That Warrant a Look
Here are some companies in the basic materials space you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:
Agnico Eagle Mines Limited AEM, scheduled to release earnings on Oct. 30, has an Earnings ESP of +4.69% and carries a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for AEM’s earnings for the third quarter is currently pegged at 96 cents.
CF Industries Holdings, Inc. CF, slated to release earnings on Oct. 30, has an Earnings ESP of +7.08% and carries a Zacks Rank #1 at present.
The consensus mark for CF’s third-quarter earnings is currently pegged at $1.05.
Kinross Gold Corporation KGC, scheduled to release third-quarter earnings on Nov. 5, has an Earnings ESP of +15.63%.
The Zacks Consensus Estimate for Kinross Gold's earnings for the third quarter is currently pegged at 16 cents. KGC currently carries a Zacks Rank #3.
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FMC Corporation (FMC) : Free Stock Analysis Report
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