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FMC Corp (FMC) Beats Earnings and Revenue Estimates in Q4

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FMC Corporation FMC recorded earnings (as reported) of 38 cents per share in fourth-quarter 2020 compared with a loss of 2 cents reported a year ago.

Barring one-time items, adjusted earnings per share were $1.42, topping the Zacks Consensus Estimate of $1.38.

Revenues were $1,152.2 million for the quarter, down 4% from the year-ago quarter. It also beat the Zacks Consensus Estimate of $1,135.6 million.

The decline in revenues was due to 3% lower volumes and 5% unfavorable impact of currencies, partly offset by a 4% contribution from pricing. The company saw strong volume gains in EMEA (Europe, Middle East, and Africa) and Asia, which was more than offset by softness in North America and Latin America.

FMC Corporation Price, Consensus and EPS Surprise

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

FMC Corporation price-consensus-eps-surprise-chart | FMC Corporation Quote

Regional Sales Performance

Sales dropped 34% year over year in North America in the quarter, hurt by supply chain disruptions partly due to pandemic-related factors, and reduced volumes in lower-value pre-emergent herbicides.

Sales in Latin America fell 9% year over year in the reported quarter due to currency headwinds, drought conditions in Brazil and import challenges in Argentina.

In EMEA, sales surged 45% year over year. Sales were aided by strength in diamide insecticides and cereal herbicides.

Revenues climbed 11% year over year in Asia on the back of volume gains in India, China, Japan and Australia.

FY20 Results

Earnings (as reported) for full-year 2020 was $4.22 per share, up from $3.62 per share a year ago. Adjusted earnings were $6.19 per share, up 2% year over year.

Revenues rose 1% year over year to roughly $4,642.1 million for the full year.

Financials

The company had cash and cash equivalents of $568.9 million at the end of 2020, up roughly 68% year over year. Long-term debt was $2,929.5 million, down around 3% year over year.

The company generated cash flow from operations of $737 million and free cash flow of $544 million in 2020.

Guidance

For 2021, FMC sees revenues to be between $4.9 billion and $5.1 billion, indicating a rise of 8% at the midpoint versus 2020. The growth is expected to be driven mainly by volumes with price increases more than offsetting currency headwinds.

Moreover, FMC envisions adjusted EBITDA of $1.32-$1.42 billion for 2021, indicating a 10% rise at the midpoint versus 2020.

Adjusted earnings per share for 2021 are forecast in the range of $6.65-$7.35, reflecting an increase of 13% at the midpoint compared with 2020.

Free cash flow for 2021 is projected to be $530-$620 million, indicating a 6% year-over-year increase.

For first-quarter 2021, revenues are projected in the band of $1.13-$1.20 billion, reflecting a decline of 7% at the midpoint compared with the prior-year quarter. Adjusted earnings are forecast in the range of $1.40-$1.60 per share, representing a decline of 18% at the midpoint compared with the prior-year quarter.

Price Performance

FMC’s shares are up 10.9% over a year against the industry’s 22.5% rise.

Zacks Rank & Key Picks

FMC currently carries a Zacks Rank #4 (Sell).

Better-ranked stocks worth considering in the basic materials space include Fortescue Metals Group Limited FSUGY, Impala Platinum Holdings Limited IMPUY and New Gold Inc. NGD.

Fortescue has a projected earnings growth rate of 74.2% for the current fiscal. The company’s shares have surged around 157% in a year. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Impala Platinum has an expected earnings growth rate of 189.4% for the current fiscal. The company’s shares have rallied around 56% in the past year. It currently carries a Zacks Rank #1.

New Gold has a projected earnings growth rate of 733.3% for the current year. The company’s shares have shot up around 112% in a year. It currently carries a Zacks Rank #2 (Buy).

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