FMC Corporation (NYSE:FMC) FMC will release first-quarter 2020 results on May 5, after the closing bell.
The company beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters. In this timeframe, it delivered an average positive surprise of roughly 10.1%.
The company is likely have benefited from favorable demand for its herbicides and insecticides in the quarter. However, some unfavorable impacts from raw materials cost inflation and currency swings are likely to reflect on its results.
Let’s see how things are shaping up for this announcement.
Zacks Model
Our proven model predicts 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 +0.38%. The Zacks Consensus Estimate for earnings the first quarter is currently pegged at $1.76. 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 #3.
What do the Estimates Say?
The company recently noted that its preliminary sales for the first quarter showed a rise of roughly 5% year over year. It also expects adjusted EBITDA and adjusted earnings to be $356 million and $1.81 per share, respectively, both at the midpoint of its first-quarter guidance ranges.
The Zacks Consensus Estimate for first-quarter sales is currently pegged at $1,233 million, which suggests a 3.4% rise year over year.
Some Factors at Play
Strong demand for the company’s herbicides and insecticides and benefits of new product launches are likely to get reflected on its first-quarter results. The company is seeing healthy demand from sugarcane growers in Brazil as well as solid demand for herbicides in soybean applications in Argentina. Strong demand for herbicides and insecticides is also driving the company’s agriculture business in North America. Healthy demand for insecticides is also driving volumes in Asia. Demand strength across these regions is likely to have continued in the quarter to be reported.
Moreover, FMC remains focused on boosting its market position and strengthening its product portfolio. It is investing in technologies and products as well as new launches to enhance value to the farmers. New products are likely to have contributed to its volumes in the March quarter.
However, the coronavirus pandemic is likely to have impacted supply chain and logistics in the first quarter. The company is likely to have faced headwind from higher raw material costs, partly due to supply disruptions in China amid the outbreak.
The company is also exposed to headwind from unfavorable currency translation, which might have impacted its sales and margins. It expects currency impact of $16 million for the first quarter.
Stocks Poised to Beat Estimates
Here are some companies in the basic materials space you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:
The Scotts Miracle-Gro Company (NYSE:SMG) SMG, scheduled to release earnings on May 6, has an Earnings ESP of +1.49% and carries a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
U.S. Silica Holdings, Inc. SLCA, scheduled to release earnings on May 1, has an Earnings ESP of +7.25% and carries a Zacks Rank #3.
Yamana Gold (NYSE:AUY) Inc. AUY, scheduled to release earnings on Apr 30, has an Earnings ESP of +7.14% and carries a Zacks Rank #3.
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FMC Corporation (FMC): Free Stock Analysis Report
U.S. Silica Holdings, Inc. (SLCA): Free Stock Analysis Report
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Yamana Gold Inc. (AUY): Free Stock Analysis Report
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