FMC Beats Earnings & Sales Estimates in Q1, Raises 2019 View

FMC Corporation FMC logged profits (as reported) of $215.7 million or $1.62 per share in first-quarter 2019, down from $267.2 million or $1.96 per share it earned a year ago.  

Barring one-time items, adjusted earnings per share (EPS) came in at $1.72 in the quarter, up roughly 9% year over year. The figure exceeded the Zacks Consensus Estimate of $1.62.

Revenues climbed roughly 7.6% year over year to $1,192.1 million. It also surpassed the Zacks Consensus Estimate of $1,189.7 million. Revenue growth was supported by 9% contribution from volume along with 5% contribution from price, which was partly offset by a 6% adverse impact of foreign currencies.

FMC Corporation Price, Consensus and EPS Surprise

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

Regional Sales Performance

The company achieved higher pricing in all regions during the reported quarter.

Sales in Latin America climbed 30% year over year and more than 40% excluding foreign exchange. This was mainly driven by Brazil, including strong sales growth for soybean, cotton and sugarcane applications.

Sales grew 7% year over year in North America supported by demand in pre-emergent herbicides for insecticides and soybeans.

In EMEA, sales expanded 3% year over year and 11% excluding foreign exchange. This was mainly driven by price increases, favorable weather along with demand for FMC’s insecticide portfolio.

Revenues grew 1% year over year in Asia and 8% excluding foreign exchange. This was mainly driven by growth in insecticides in China along with strong growth in Pakistan and Japan and sustained sales synergies in India.

Balance Sheet

As of Mar 31, 2019, FMC had cash and cash equivalents of $109.5 million. Long-term debt was $2,145 million at the end of the first quarter.

Guidance

For 2019, the company expects revenues to be between $4.5 billion and $4.6 billion, indicating a rise of 6% at the midpoint versus recast 2018 and $50 million higher than the prior guidance. Adjusted EPS is forecast in the range $5.62-$5.82, an increase of 9% at the midpoint compared with recast 2018 and 7 cents higher than the prior guidance.

For second-quarter 2019, revenues are projected in the band $1.185-$1.215 billion, indicating 4% growth at the midpoint compared with recast second-quarter 2018. Adjusted EPS is expected to be in the range $1.60-$1.70, indicating 10% growth at the midpoint compared with recast second-quarter 2018 figure.

Price Performance

Shares of FMC have declined 13.2% in the past year compared with the industry’s decline of 24.1%.

Zacks Rank & Key Picks

FMC currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space are Sandstorm Gold Ltd. SAND, Flexible Solutions International Inc FSI and The Scotts Miracle-Gro Company SMG.

Sandstorm Gold has an expected earnings growth rate of 200% for the current year and sports a Zacks Rank #1 (Strong Buy). The stock has gained around 9.5% in the past year.  You can see the complete list of today’s Zacks #1 Rank stocks here.

Flexible Solutions has an expected earnings growth rate of 171.4% for the current year and carries a Zacks Rank #2 (Buy). Its shares have soared roughly 110.5% in the past year.

Scotts Miracle-Gro has an expected earnings growth rate of 14.6% for the current year and holds a Zacks Rank #2. Its shares have gained around 14.1% in the past year.

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