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FMC Corp (FMC) to Post Q4 Earnings: What's in the Cards?

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FMC Corporation FMC will release fourth-quarter 2020 results after the closing bell on Feb 9. The company’s results are likely to have been affected by supply chain disruptions in North America, drought conditions in Brazil and import challenges in Argentina.

The company beat the Zacks Consensus Estimate for earnings in each of the last four quarters. It has a trailing four-quarter earnings surprise of 7.7%, on average.

Shares of FMC have gained 5.5% in the past year compared with 18.8% rise of the industry.

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

What do the Estimates Say?

The Zacks Consensus Estimate for fourth-quarter sales for FMC is currently pegged at $1,135.6 million, which suggests a 5.1% drop year over year.

The Zacks Consensus Estimate for revenues for North America is pinned at $284 million, which suggest a 33.9% increase on a sequential basis. The consensus estimate for Latin America is $545 million, indicating an increase of 17.2% sequentially.

The Zacks Consensus Estimate for Asia is at $286 million, indicating a 12.2% sequential increase. The same for EMEA (Europe, Middle East, and Africa) is pegged at $156 million, calling for a 1.9% sequential increase.

Zacks Model

Our proven model does not conclusively predict an earnings beat for FMC Corp 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 Corp is -5.18%. The Zacks Consensus Estimate for earnings for the fourth quarter is currently pegged at $1.46. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

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

Some Factors at Play

FMC Corp is focused on boosting its market position and strengthening its product portfolio. It is investing in technologies and products as well as new launches to enhance value to the farmers. New product launches are likely to have contributed to its volumes in the fourth quarter.

However, softness in North and Latin America is likely to have hurt results in the to-be-reported quarter. Last month, the company, cut its outlook for the fourth-quarter.It expects revenues for the quarter to be roughly $1.15 billion, compared with the prior guidance of $1.23-$1.29 billion. The fourth-quarter adjusted EBITDA is expected in the range of $285-$295 million compared with the earlier guidance of $335-$355 million.

Sales in North America were affected in the fourth quarter due to supply chain disruptions, which includes pandemic-related factors linked with logistics and tolling partner, the company noted. Most of these incidents took place in the busy month of December, due to which products were not being delivered to customers by the quarter end.

Sales in Brazil were also lower than expected due to severe drought conditions, which continued throughout the fourth quarter. This led to reduced demand in the quarter. The company also faced import challenges in Argentina.The substantial product inventory in bonded warehouses of Argentina was not released by custom officials in a timely manner.

FMC is also exposed to significant headwind from unfavorable currency translation, which might have impacted sales and margins in the fourth quarter. It expects currency headwind of $247 million on EBITDA for 2020.

The company is also likely to have faced some headwinds from cost inflation due to pandemic-led disruptions. It sees $31 million cost headwind on its adjusted EBITDA in the fourth quarter. This is likely to have put pressure on margins in the quarter to be reported.

FMC Corporation Price and EPS Surprise

FMC Corporation Price and EPS Surprise
FMC Corporation Price and EPS Surprise

FMC Corporation price-eps-surprise | FMC Corporation Quote

Other Stocks That Warrant a Look

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

Koppers Holdings Inc. KOP, scheduled to release earnings on Feb 24, has an Earnings ESP of +23.20% and carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Orion Engineered Carbons S.A. OEC, scheduled to release earnings on Feb 18, has an Earnings ESP of +22.33% and carries a Zacks Rank #2.

SSR Mining Inc. SSRM, scheduled to release earnings on Feb 17, has an Earnings ESP of +2.57% and carries a Zacks Rank #3.

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