FMC Corporation (NYSE:FMC) has entered into a definitive agreement with Nufarm Limited to divest a portion of the former’s European herbicide portfolio. Per the deal, FMC Corp.'s SU-class herbicides and Florasulam for post-emergence use for controlling broadleaf weeds in cereals will be acquired by Nufarm.
FMC Corporation Price and Consensus
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FMC Corp. will receive $90 million, which includes the purchase of existing product inventory. The divestiture will also satisfy FMC Corp.'s commitments to the European Commission related to its recent purchase of a major portion of DuPont (NYSE:DWDP)'s Crop Protection business.
Shares of FMC Corp. have moved up 72.4% over a year outperforming the 31.3% growth recorded by its industry.
FMC Corp.’s posted earnings of $55 million or 41 cents per share in third-quarter 2017, down roughly 31% from $80 million or 59 cents a year ago. Barring one-time items, earnings came in at 70 cents per share in the quarter, exceeding the Zacks Consensus Estimate of 63 cents.
The company’s revenues rose roughly 3% year over year to $646 million in the quarter. The figure however, trailed the Zacks Consensus Estimate of $690 million.
FMC Corp. now sees adjusted earnings in the band of $2.59-$2.69 per share for 2017 (up from the prior view of $2.30 to $2.50 per share), which includes the impact of two months contribution from the DuPont Crop Protection acquisition.
For the Agricultural Solutions unit, FMC Corp. expects revenues in the range of $2.5-$2.6 billion for 2017. Segment earnings for the year are expected to be in the band of $465-$485 million. Earnings for fourth-quarter 2017 have been projected in the range of $168-$188 million.
FMC Corp. expects revenues in the range of $340-$360 million for the Lithium unit for 2017, which remains unchanged from previous guidance. However, segment earnings are forecasted to be in the band of $124-$128 million (up from $115 to $125 million expected earlier) for the full year. For the fourth quarter, earnings are expected to be in the range of $41-$45 million, reflecting doubling of earnings compared to year-ago quarter.
The company is seeing strong demand in its Lithium unit and is expanding production capacity to meet the growing demand for electric vehicles. Moreover, FMC Corp. will benefit from the cost synergies of the Cheminova buyout. The acquisition of DuPont's Crop Protection business has also provided a significant growth platform for the company's Agricultural Solutions unit. The company is also likely to gain from its efforts to expand product portfolio.
FMC Corporation Price and Consensus
FMC Corporation (FMC): Free Stock Analysis Report
Koppers Holdings Inc. (KOP): Free Stock Analysis Report
Arkema SA (ARKAY): Free Stock Analysis Report
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