FMC Corp (FMC) Tops Earnings & Revenue Estimates in Q2

FMC Corporation FMC saw its profits (as reported) surge roughly 74% to $129.7 million or 96 cents per share in second-quarter 2018 from $74.7 million or 56 cents per share it earned a year ago.

Barring one-time items, adjusted earnings came in at $1.78 per share in the quarter, exceeding the Zacks Consensus Estimate of $1.71.

The chemical maker’s revenues jumped roughly 92% year over year to $1,262.3 million. It also surpassed the Zacks Consensus Estimate of $1,228.7 million.

The company gained from strong demand for the acquired products in its Agricultural Solutions segment. Moreover, its lithium unit delivered strong results in the quarter on the back of higher volumes and prices across all major product categories.

Segment Review

Revenues from the Agricultural Solutions division jumped 98% year over year to $1.2 billion in the reported quarter, driven by the DuPont asset buyout. Segment EBITDA surged three-fold year over year to $344 million.

Revenues from the Lithium unit shot up 46% year over year to $108 million. Segment EBITDA jumped 85% to $51 million. The results were driven by higher realized prices and volumes across key product categories.

Balance Sheet

FMC Corp ended the quarter with cash and cash equivalents of $326.4 million, a nearly three-fold year-over-year rise. Long-term debt rose around 82% year over year to $2,892.9 million.

Outlook

For 2018, FMC Corp backed its adjusted earnings expectations in the band of $5.90 to $6.20 per share, a year over year increase of 123%.

For third-quarter 2018, the company expects adjusted earnings in the range of 87-97 cents per share. FMC Corp also envisions adjusted earnings per share in the range of $1.41 to $1.61 for the fourth quarter.

For the Agricultural Solutions unit, FMC Corp sees revenues for 2018 in the range of $4.1 billion to $4.3 billion. It also expects segment EBITDA for the full year in the band of $1.17 billion to $1.23 billion. For the third quarter, segment EBITDA has been forecast in the range of $195 million to $215 million.

Moreover, FMC Corp expects revenues in the range of $430 million to $460 million for the Lithium unit for 2018. It also raised the full-year outlook for segment EBITDA by $2 million to a range of $195 million to $205 million. For the third quarter, segment EBITDA has been forecast in the range of $45 million to $49 million. The company also stated that the plan to separate listing of the Lithium unit in October this year remains on track.

Price Performance

Shares of FMC Corp have moved up 6.2% over the past six months, outperforming the 2.1% growth recorded by its industry.

Zacks Rank & Stocks to Consider

FMC Corp currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks worth considering in the basic materials space include KMG Chemicals, Inc. KMG, Ingevity Corporation NGVT and Celanese Corporation CE each carrying a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

KMG Chemicals has an expected long-term earnings growth rate of 28.5%. Its shares have gained roughly 44% over a year.

Ingevity has an expected long-term earnings growth rate of 12%. The company’s shares have rallied around 67% in a year.

Celanese has an expected long-term earnings growth rate of 10%. Its shares have shot up roughly 21% over a year.

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