FMC Corp (FMC) Tops Q1 Earnings & Sales Estimates, Ups View

FMC Corporation’s (NYSE:FMC) reported net profit of $267.2 million or $1.96 per share in first-quarter 2018 against a net loss of $124 million or 92 cents per share recorded a year ago.

Barring one-time charges and gains, adjusted earnings came in at $1.84 per share in the quarter, exceeding the Zacks Consensus Estimate of $1.63.

The chemical maker’s revenues jumped more than two-fold year over year to $1,210.7 million. The figure also surpassed the Zacks Consensus Estimate of $1,146.1 million.

According to the company, the Ag Solutions business, which reported its first full quarter since the acquisition of DuPont (NYSE:DWDP) crop protection, demonstrated its ability to generate very strong demand for the acquired products and the success of its integration globally. Moreover, the company’s expansion of lithium hydroxide in China and price increases of roughly 30% on hydroxide nearly doubled Lithium segment’s profitability year over year.

FMC Corporation Price, Consensus and EPS Surprise

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

Segment Review

Revenues from the Agricultural Solutions division jumped a whopping 108.9% year over year to $1,107.9 million in the first quarter, driven by the DuPont asset buyout. Segment earnings were $356 million, up 250% year over year.

Revenues from the Lithium unit surged 57% year over year to $103 million. Segment earnings nearly doubled to $50 million. Higher year-over-year prices on all product categories, higher volume from debottlenecking projects in Argentina, lower operating costs and hydroxide expansion in China were the major contributors to growth.

Balance Sheet

FMC Corp ended the first quarter with cash and cash equivalents of $359.7 million, a 27.1% year-over-year rise.

Long-term debt was almost flat year over year at $2,993.2 million.

Outlook

For 2018, FMC Corp increased adjusted earnings expectations to the band of $5.90 to $6.20 per share (up from $5.20 to $5.60 expected earlier).

For second-quarter 2018, the company expects adjusted earnings in the range of $1.65 to $1.75 per share. The company stated that the plan to separate listing of its Lithium unit in October this year also remains on track.

For the Agricultural Solutions unit, FMC Corp increased revenue expectations for 2018 in the range of $4.05 billion to $4.25 billion (revised up from $3.95 billion to $4.15 billion).

FMC Corp now expects revenues in the range of $430 million to $460 million (up from prior guidance of $420 million to $460 million) for the Lithium unit for 2018.

Price Performance

Shares of FMC Corp have moved up 13.6% over a year, outperforming the 8.6% gain recorded by its industry.

Zacks Rank & Other Stocks to Consider

FMC Corp currently carries a Zacks Rank #2 (Buy).

Other stocks worth considering in the basic materials space include Steel Dynamics, Inc. (NASDAQ:STLD) , Huntsman Corporation (NYSE:HUN) and Kronos Worldwide Inc. (NYSE:KRO) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Steel Dynamics has an expected long-term earnings growth rate of 12%. Its shares have soared 24.6% over a year.

Huntsman has an expected long-term earnings growth rate of 8.3%. Its shares have rallied 19.6% over a year.

Kronos has an expected long-term earnings growth rate of 5%. Its shares have surged 38% over a year.

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