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FMC Corp (FMC) to Post Q3 Earnings: What's in the Offing?

Zacks Equity Research

FMC Corporation FMC will release third-quarter 2019 results on Oct 29, after the closing bell. The company’s results are likely to reflect favorable demand for its herbicides and insecticides. However, some unfavorable impacts from raw materials cost inflation are likely to have affected its performance.

The company beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters. In this timeframe, it delivered an average positive surprise of roughly 4.2%.

Let’s see how things are shaping up for this announcement.

Factors at Play

FMC, in July, said that it expects revenues for the third quarter in the band of $960-$990 million, indicating 6% growth at the midpoint compared with recast third-quarter 2018.

The Zacks Consensus Estimate for third-quarter revenues is currently pegged at $975.7 million.

The company also expects adjusted earnings for the quarter in the range of 75-85 cents per share, indicating 13% growth at the midpoint compared with recast third-quarter 2018 figure.

Strong demand for the company’s herbicides and insecticides is likely to have driven its revenues in the third quarter. Benefits of higher pricing are also likely to reflect in sales and earnings.

The company is seeing higher demand for its premium product portfolio. In Latin America, it is witnessing strong demand for cotton and sugarcane applications in Brazil. Continued growth of Rynaxypyr and Cyazypyr insect controls is likely to have contributed to sales growth in Latin America in the September quarter.

However, FMC is exposed to challenges from higher raw material costs. It witnessed an unfavorable impact of $46 million from raw material cost inflation on EBITDA in the second quarter. The company’s third-quarter results are expected to continue to reflect some impact of input cost inflation. FMC sees $39 million in raw material cost headwind in the third quarter.

Zacks Model

Our proven model does not conclusively predict that FMC is likely to beat the Zacks Consensus Estimate this quarter. 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 -1.88%. The Most Accurate Estimate for the third quarter is currently pegged at 79 cents while the Zacks Consensus Estimate stands at 80 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: FMC carries a Zacks Rank #3.  

Stocks to Consider

Here are some companies in the basic materials space that you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:

Kinross Gold Corporation KGC, scheduled to release earnings on Nov 6, has an Earnings ESP of +2.50% and carries a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

CF Industries Holdings, Inc. CF scheduled to release earnings on Oct 30, has an Earnings ESP of +7.56% and carries a Zacks Rank #2.

Arconic Inc. ARNC, scheduled to release earnings on Nov 5, has an Earnings ESP of +1.42% and carries a Zacks Rank #3.

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FMC Corporation (FMC) : Free Stock Analysis Report
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