Philadelphia-based agricultural-sciences corporation, FMC (NYSE:FMC), has adjusted its financial outlook for the second time in four months, attributing the decision to obstacles encountered in the Latin American market. The company, specializing in the production of herbicides, insecticides, and fungicides, has experienced a significant decline in sales volumes due to channel destocking in Brazil and an intense drought in Argentina.
On Monday, FMC announced that its Q4 revenue is now projected to be between $1.14 billion and $1.38 billion, with adjusted EBITDA predicted to fall within the range of $246 million-$306 million. This adjustment follows a revised Q3 revenue expectation of $982 million and adjusted earnings of 44 cents per share.
The company's updated revenue projection for 2023 stands at $4.48-$4.72 billion, a significant decrease from its initial forecast of $5.2-$5.4 billion. The adjusted EBITDA is now expected to be between $970 million and $1.03 billion, compared to the original prediction of $1.3-$1.4 billion.
According to InvestingPro data, FMC's market cap is $8350M USD, with a P/E Ratio of 13.67. The company's revenue for the last twelve months (LTM2023.Q2) stands at $5358M USD, indicating a decrease in revenue growth by -0.97%. The company's operating income, adjusted for LTM2023.Q2, is $1064.8M USD, with an operating income margin of 19.87%.
FMC's CEO Mark Douglas has revealed that the company is currently restructuring its operations in Brazil due to the severe destocking issue that has affected sales volumes significantly. This restructuring comes after FMC had previously altered its forecast in July due to global inventory pullbacks.
InvestingPro Tips highlights that FMC's management has been aggressively buying back shares, and the company yields a high return on invested capital. Despite facing challenges, the company has maintained dividend payments for 18 consecutive years and has raised its dividend for 5 consecutive years. However, it's worth noting that 6 analysts have revised their earnings downwards for the upcoming period.
The series of downward revisions indicates that FMC faces considerable challenges navigating the market conditions in Latin America, particularly with issues like severe weather conditions and inventory management impacting sales performance and overall revenue projections. For more insights and tips, consider checking out InvestingPro which offers a total of 12 tips for FMC.
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