FMC Corporation Poised for Earnings Surge Despite Past Year Decline
Analysts Predict Strong Q4 Results for Agricultural Innovator
FMC Corporation (FMC), located in Philadelphia, Pennsylvania, specializes in agricultural sciences, focusing on crop protection technologies that promote sustainable farming. With a market cap of $6.3 billion, FMC supplies a range of products including crop protection, plant health, and pest management solutions. The company plans to share its fourth-quarter earnings after the stock market closes on Tuesday, February 4.
Analysts anticipate a significant increase in FMC’s non-GAAP profit, expecting it to reach $1.65 per share. This figure represents a remarkable rise of 54.2% compared to $1.07 per share from the same quarter last year. Although the company has shown a mixed earnings surprise history—beating estimates three times out of the last four quarters—it did fall short on one occasion. For its last reported quarter, adjusted EPS surged 56.8% year-over-year, reaching $0.69 and surpassing Wall Street’s expectations by 40.8%.
Looking ahead, FMC’s adjusted EPS for the full fiscal year 2024 is forecasted to decline by 11.6% to $3.34. However, a rebound is on the horizon, as earnings for fiscal 2025 are expected to rise by 36.5%, reaching $4.56 per share.
FMC shares have decreased by 18.3% over the past year, a stark contrast to the marginal drop experienced by the Materials Select Sector SPDR Fund (XLB) and the 24.4% rise of the S&P 500 Index ($SPX) during the same period.
Following the release of strong Q3 results on October 29, FMC stock jumped by 10.7%. Sales in North America climbed impressively, increasing 47.6% year-over-year to $235.5 million, while Latin America saw an 8.2% rise to $504.1 million, effectively compensating for slumps in EMEA and Asia. Overall, total revenues grew by 8.5% to about $1.1 billion. However, a decline in pricing caused gross margins to slip 255 basis points from the previous year, resulting in modest gross profit growth of 1.4%, totaling $386.4 million.
In brighter news, FMC made significant gains in cash flow, seeing operating cash flows rise to $308.8 million, a dramatic improvement compared to the negative $618.2 million reported in the same period last year. The company attributes this to successful new product sales and cost-saving measures from its restructuring efforts, expecting further earnings growth in upcoming quarters.
The outlook on FMC stock remains moderately bullish, earning an overall “Moderate Buy” rating from analysts. Out of 17 analysts reviewing the stock, six suggest a “Strong Buy,” one recommends a “Moderate Buy,” nine opt for “Hold,” and one indicates a “Moderate Sell.” The mean price target stands at $66.80, suggesting an impressive 32.8% potential upside from current prices.
On the date of publication, Aditya Sarawgi did not hold any positions, either directly or indirectly, in the securities mentioned in this article. All information and data in this article are intended solely for informational purposes. For more details, please refer to the Barchart Disclosure Policy here.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
