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FMC Corp (FMC) Q4 Earnings Top Estimates, Profit Shoots Up

Zacks

FMC Corporation’s FMC profits skyrocketed in fourth-quarter 2017, buoyed by a hefty gain (of $727 million) from the sale of its Health and Nutrition division. Consolidated profit, as reported, shot up to $530 million or $3.94 per share in the reported quarter from $16 million or 12 cents per share a year ago.

Barring one-time charges and gains, earnings came in at $1.10 per share in the quarter, exceeding the Zacks Consensus Estimate of $1.03.

The chemical maker’s revenues soared roughly 42% year over year to $980 million in the reported quarter, boosted by the acquisition of a major portion of DuPont's Crop Protection business. Sales, however, trailed the Zacks Consensus Estimate of $1,002 million.

FMC Corporation Price, Consensus and EPS Surprise

FMC Corporation Price, Consensus and EPS Surprise | FMC Corporation Quote


FY17 Results

For 2017, the company logged profits of $536 million or $3.99 per share, a roughly two-and-a-half-fold surge from $209 million or $1.56 per share recorded in 2016. Adjusted earnings for the year came in at $2.71 per share, up 41% year over year.

Revenues for the full year went up 13% year over year to around $2.9 billion.

Segment Review

Revenues from the Agricultural Solutions division jumped 40% year over year to $866 million in the fourth quarter, driven by the DuPont asset buyout. Sales were also supported by double-digit growth across North America, Asia and Europe. Segment earnings were $189 million, up 48% year over year.

Revenues from the Lithium unit surged 60% year over year to $113 million. Segment earnings more than doubled year-over-year to $44 million, driven by higher volume from the company’s new hydroxide operations in China and increased year-over-year prices.

Balance Sheet

FMC Corp. ended 2017 with cash and cash equivalents of $283 million, a more than four-fold year over year rise.

Long-term debt was $2,993 million, up around 66% year over year.

Outlook

Moving ahead, FMC Corp. sees adjusted earnings in the band of $5.20 to $5.60 per share for 2018. For first-quarter 2018, the company expects adjusted earnings in the range of $1.45 to $1.59 per share. The company also plans to conduct a separate listing of its Lithium unit in the second half of this year to create two separate public companies.

For the Agricultural Solutions unit, FMC Corp. expects revenues for 2018 in the range of $3.95 billion to $4.15 billion. Segment EBITDA for the year are expected to be in the band of $1.05 billion to $1.15 billion. EBITDA for first-quarter 2018 have been projected in the range of $290 million to $320 million.

FMC Corp. expects revenues in the range of $420 million to $460 million for the Lithium unit for 2018. Segment EBITDA are forecasted to be in the band of $180 million to $200 million for the full year. For the first quarter, EBITDA is expected to be in the range of $44 million to $48 million.

Price Performance

Shares of FMC Corp. have moved up 45.1% over a year, outperforming the 14.6% gain recorded by its industry.



Zacks Rank & Stocks to Consider

FMC Corp. has a Zacks Rank #3 (Hold).

Better-ranked companies in the basic materials space include are Olympic Steel, Inc. ZEUS, Methanex Corporation MEOH and The Mosaic Company MOS, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Olympic Steel has an expected long-term earnings growth rate of 7.5%. Its shares rallied 32% over the past six months.

Methanex has an expected long-term earnings growth rate of 15%. Its shares have rallied 26% over the past six months.

Mosaic has an expected long-term earnings growth rate of 9.5%. Its shares have rallied 24% over the past six months.

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