FMC Corp (FMC) Reports Mixed 2023 Results and Provides 2024 Guidance

In this article:
  • Revenue: $1.15 billion in Q4 2023, down 29% from Q4 2022; $4.49 billion for full-year 2023, a 23% year-over-year decrease.

  • GAAP Net Income: $1.10 billion in Q4 2023, a 291% increase from Q4 2022; $1.32 billion for full-year 2023, up 78% from 2022.

  • Adjusted EBITDA: $254 million in Q4 2023, a 41% decrease from Q4 2022; $978 million for full-year 2023, down 30% from 2022.

  • GAAP Earnings Per Share: $8.77 in Q4 2023, up 304% from Q4 2022; $10.53 for full-year 2023, an 81% increase from 2022.

  • Adjusted Earnings Per Share: $1.07 in Q4 2023, down 55% from Q4 2022; $3.78 for full-year 2023, a 49% decrease from 2022.

  • Free Cash Flow: Negative $524 million for full-year 2023, a 202% decline from 2022.

  • 2024 Outlook: Revenue projected between $4.50 to $4.70 billion; Adjusted EBITDA between $900 million to $1.05 billion; Adjusted EPS between $3.23 to $4.41.

On February 5, 2024, FMC Corp (NYSE:FMC) released its 8-K filing, announcing its fourth quarter and full-year 2023 results, which were within guidance ranges, and provided its outlook for 2024. FMC, a leading global crop protection company, experienced a significant decline in revenue due to continued channel destocking and adverse weather, particularly in Brazil. Despite these challenges, the company's GAAP net income surged, primarily due to one-time tax benefits related to its Swiss subsidiaries.

FMC's performance in the fourth quarter was marked by a 29% decrease in revenue compared to the same period in 2022, with organic revenue down 30%. Adjusted EBITDA for the quarter fell by 41%, and adjusted earnings per diluted share saw a 55% decline. However, GAAP net income for the quarter increased by a staggering 291%, and earnings per diluted share rose by 304%, largely due to significant tax incentives.

For the full year of 2023, FMC reported a 23% decrease in revenue, with a 22% organic decline. The full-year GAAP net income increased by 78%, and earnings per diluted share went up by 81%. Adjusted earnings per diluted share, however, decreased by 49% compared to 2022. The company's cash flow from operations was negative $300 million, a 145% decrease, and free cash flow was negative $524 million, down 202% from the previous year.

FMC's 2024 outlook anticipates a slight revenue growth at the midpoint and essentially flat adjusted EBITDA compared to the prior year. The company expects adjusted earnings per diluted share to reflect a 1% growth at the midpoint, with free cash flow projected to be in the range of $400 to $600 million.

FMC Corp (FMC) Reports Mixed 2023 Results and Provides 2024 Guidance
FMC Corp (FMC) Reports Mixed 2023 Results and Provides 2024 Guidance

Financial Highlights and Challenges

Despite the decline in revenue and adjusted earnings, FMC's new product introductions (NPI) sales reached an annual record of 13 percent of total revenue, amounting to $590 million. The company's leading technologies, particularly branded diamides, continued to gain traction with growers, showcasing the importance of innovation in the agricultural industry.

Mark Douglas, FMC president and CEO, commented on the results, stating,

Despite challenging market conditions in 2023, we maintained very healthy adjusted EBITDA margins by holding or raising price in most countries and by aggressively managing costs in response to the demand decline."

He also emphasized the resilient performance of FMC's differentiated products and the company's focus on innovation.

Looking ahead, FMC's 2024 outlook is based on factors within its control, viewing the year as a transition period with momentum expected to build, driven by new technologies and the benefits of restructuring actions, along with an improving demand backdrop.

Value investors may find FMC's commitment to innovation and cost management, coupled with the expected benefits from restructuring, to be compelling reasons to consider the company's stock. The 2024 outlook suggests potential for recovery and growth, making FMC a company to watch in the agricultural sector.

For more detailed information, investors and interested parties can access the full earnings release and supplemental information on FMC's investor relations website.

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Explore the complete 8-K earnings release (here) from FMC Corp for further details.

This article first appeared on GuruFocus.