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The company beat the Zacks Consensus Estimate for earnings in each of the last four quarters. FMC has a trailing four-quarter earnings surprise of around 4.5%, on average. The company posted an earnings surprise of around 2.3% in the last reported quarter.
FMC's second-quarter performance is expected to have been impacted by channel partners' inventory reduction. However, cost mitigation actions are expected to have supported the company's financials.
Shares of FMC have declined 11.7% in the past year against a 10.1% rise of the industry.
Image Source: Zacks Investment Research
Let’s see how things have shaped up for this announcement.
What Do the Estimates Say?
FMC, earlier this month, revised its revenue expectations for the second quarter to a range of $1-$1.03 billion. This reflects a decrease from the earlier guidance of $1.42 to $1.48 billion. Similarly, adjusted EBITDA for the same period is now projected in the range of $185 to $190 million, indicating a decline from the previous guidance of $350 to $370 million.
The Zacks Consensus Estimate for second-quarter sales for FMC is currently pegged at $1,019 million, suggesting a 29.8% year-over-year fall.
Our estimate for North America revenues is currently pegged at $288.2 million, suggesting a 21% year-over-year decline.
We expect Latin America sales to be $268.2 million, indicating a 37.8% year-over-year plunge.
Our estimate for Europe, the Middle East and Africa sales stands at $204 million, calling for a 27.4% year-over-year decline.
The same for Asia is pegged at $265.7 million, indicating a 29.2% decrease on a year-over-year basis.
Some Factors at Play
Lower volumes are expected to have weighed on FMC’s second-quarter results. It witnessed a significant drop in volumes during the second quarter. The company attributed this decline to its channel partners' active inventory reduction in North America, Latin America and EMEA. These volume declines are likely to have impacted FMC's revenues in the second quarter.
Despite the unexpected inventory reduction, FMC's on-the-ground consumption of products remained strong in the second quarter, comparable to levels seen in the previous year. This indicates that actual demand for FMC's offerings remained intact, even though channel partner actions have impacted volumes.
To offset the effects of market contraction and inventory reduction, FMC has taken significant cost mitigation actions. These measures have been implemented to optimize operations and manage the financial impacts effectively. The company’s cost-saving initiatives and improved input costs are likely to have aided its performance in the June quarter.
Zacks Model
Our proven model does not predict an earnings beat for FMC this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earning beat.
Earnings ESP: Earnings ESP for FMC is 0.00%. The Zacks Consensus Estimate for the second quarter is currently pegged at 59 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: FMC currently carries a Zacks Rank #4 (Sell).
Here are some companies in the basic materials space you may want to consider, as our model shows these have the right combination of elements to post earnings beat this quarter:
The Zacks Consensus Estimate for ECL’s second-quarter earnings is pegged at a profit of $1.21.
ATI Inc. (ATI - Free Report) , slated to release earnings on Aug 2, has an Earnings ESP of +1.08% and carries a Zacks Rank #2 at present.
The consensus mark for ATI’s second-quarter earnings is currently pegged at 55 cents.
Kinross Gold Corporation (KGC - Free Report) , which is slated to release its earnings on Aug 2, has an Earnings ESP of +2.03% and a Zacks Rank #3 at present.
The consensus estimate for KGC’s second-quarter earnings is currently pegged at 8 cents.
Image: Bigstock
FMC Gears Up to Report Q2 Earnings: What's in the Cards?
FMC Corporation (FMC - Free Report) will release second-quarter 2023 results after the closing bell on Aug 2.
The company beat the Zacks Consensus Estimate for earnings in each of the last four quarters. FMC has a trailing four-quarter earnings surprise of around 4.5%, on average. The company posted an earnings surprise of around 2.3% in the last reported quarter.
FMC's second-quarter performance is expected to have been impacted by channel partners' inventory reduction. However, cost mitigation actions are expected to have supported the company's financials.
Shares of FMC have declined 11.7% in the past year against a 10.1% rise of the industry.
Image Source: Zacks Investment Research
Let’s see how things have shaped up for this announcement.
What Do the Estimates Say?
FMC, earlier this month, revised its revenue expectations for the second quarter to a range of $1-$1.03 billion. This reflects a decrease from the earlier guidance of $1.42 to $1.48 billion. Similarly, adjusted EBITDA for the same period is now projected in the range of $185 to $190 million, indicating a decline from the previous guidance of $350 to $370 million.
The Zacks Consensus Estimate for second-quarter sales for FMC is currently pegged at $1,019 million, suggesting a 29.8% year-over-year fall.
Our estimate for North America revenues is currently pegged at $288.2 million, suggesting a 21% year-over-year decline.
We expect Latin America sales to be $268.2 million, indicating a 37.8% year-over-year plunge.
Our estimate for Europe, the Middle East and Africa sales stands at $204 million, calling for a 27.4% year-over-year decline.
The same for Asia is pegged at $265.7 million, indicating a 29.2% decrease on a year-over-year basis.
Some Factors at Play
Lower volumes are expected to have weighed on FMC’s second-quarter results. It witnessed a significant drop in volumes during the second quarter. The company attributed this decline to its channel partners' active inventory reduction in North America, Latin America and EMEA. These volume declines are likely to have impacted FMC's revenues in the second quarter.
Despite the unexpected inventory reduction, FMC's on-the-ground consumption of products remained strong in the second quarter, comparable to levels seen in the previous year. This indicates that actual demand for FMC's offerings remained intact, even though channel partner actions have impacted volumes.
To offset the effects of market contraction and inventory reduction, FMC has taken significant cost mitigation actions. These measures have been implemented to optimize operations and manage the financial impacts effectively. The company’s cost-saving initiatives and improved input costs are likely to have aided its performance in the June quarter.
Zacks Model
Our proven model does not predict an earnings beat for FMC this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earning beat.
Earnings ESP: Earnings ESP for FMC is 0.00%. The Zacks Consensus Estimate for the second quarter is currently pegged at 59 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: FMC currently carries a Zacks Rank #4 (Sell).
FMC Corporation Price and EPS Surprise
FMC Corporation price-eps-surprise | FMC Corporation Quote
Stocks That Warrant a Look
Here are some companies in the basic materials space you may want to consider, as our model shows these have the right combination of elements to post earnings beat this quarter:
Ecolab Inc. (ECL - Free Report) , slated to release earnings on Aug 1, has an Earnings ESP of +0.50% and carries a Zacks Rank #2 at present. You can see the complete list of today’s Zacks Rank #1 stocks here.
The Zacks Consensus Estimate for ECL’s second-quarter earnings is pegged at a profit of $1.21.
ATI Inc. (ATI - Free Report) , slated to release earnings on Aug 2, has an Earnings ESP of +1.08% and carries a Zacks Rank #2 at present.
The consensus mark for ATI’s second-quarter earnings is currently pegged at 55 cents.
Kinross Gold Corporation (KGC - Free Report) , which is slated to release its earnings on Aug 2, has an Earnings ESP of +2.03% and a Zacks Rank #3 at present.
The consensus estimate for KGC’s second-quarter earnings is currently pegged at 8 cents.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.