Key Takeaways
- FMC shares fell sharply after the chemical maker issued first-quarter earnings steering considerably beneath analysts' expectations because of weak gross sales volumes and destocking challenges.
- The corporate's Latin American enterprise reported a 38% decline in fourth-quarter gross sales, compounded by drought situations in Brazil.
- Though the FMC share worth has not too long ago clawed again above the 50-day transferring common, it seems poised to retest the important thing $50 stage.
FMC Company
Supply: TradingView.com.
Shares in FMC Corp. (FMC) tumbled greater than 14% forward of Tuesday’s opening bell after the agriculture chemical producer issued weak first-quarter earnings steering as the corporate continues to grapple with low gross sales volumes and destocking challenges within the aftermath of the pandemic.
The maker of pesticides and harvest aids mentioned it expects present quarter adjusted earnings to vary between 21 and 43 cents per share, lower than half the $1-a-share determine analysts had forecast. For the three month interval ending December 31, the corporate posted adjusted earnings per share (EPS) of $1.07, in contrast with $2.37 a 12 months earlier, whereas income of $1.15 billion declined 29% from the prior 12 months’s corresponding quarter.
FMC mentioned that destocking offered ongoing challenges in all of its geographic areas. Through the pandemic, provide chain bottlenecks led many distributors to stockpile crop chemical substances, leading to extra stock ranges that prospects are nonetheless working by. The chemical maker additionally mentioned drought situations in Brazil had weighed on earnings. Within the December quarter, FMC’s Latin American enterprise, which accounts for roughly a 3rd of whole income, posted a 38% decline in gross sales.
"Through the fourth quarter, we noticed continued channel destocking in all areas, whereas drought in Brazil additionally amplified challenges in Latin America," Chief Government Officer Mark Douglas mentioned within the firm’s incomes’s assertion.
Since dropping beneath the important thing $50 stage in in late October on the again of a disappointing third-quarter replace, the FMC share worth considerably stabilized and even managed to claw again above the 50-day transferring common. If earnings-driven promoting intensifies in upcoming buying and selling classes, hold a detailed eye if patrons can defend the $50 stage. A profitable maintain of this space might assist shift investor sentiment, whereas a convincing breakdown could result in a resumption of the long-term downtrend.
FMC shares have been down 14.1% at $51.88 about 45 minutes earlier than the opening bell.
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