FMC Corp (FMC) Q1 Earnings: What's in Store for the Stock?

FMC Corp. FMC will release its first-quarter 2017 results after the bell on May 2.
 
The chemical maker’s adjusted earnings of 88 cents per share for fourth-quarter 2016 missed the Zacks Consensus Estimate by a penny (a 1.12% negative surprise). Revenues fell year over year and also trailed expectations.

The company beat the Zacks Consensus Estimate in three of the trailing four quarters, delivering an average positive surprise of 7.23%.

Let’s see how things are shaping up for this announcement.
 
Factors to Consider

FMC Corp. sees healthy growth in its adjusted earnings in 2017. It expects adjusted earnings in the band of $3.20 to $3.60 per share for 2017, a year over year increase of 20% at the mid-point of the guidance range.

For the first quarter, the company expects earnings for its Agricultural Solutions division in the range of $60-$70 million. For the Health and Nutrition segment, earnings for the quarter are expected to be between $45 million and $50 million. Moreover, FMC Corp. expects earnings for its Lithium unit in the range of $18-$22 million for the first quarter.

FMC Corp. has significantly outperformed the Zacks categorized Chemicals-Diversified industry over a year, aided by its expansion actions and strong demand across specialty end markets. Its shares rallied 69.9% over this period compared with the industry’s gain of 18.2% over the same period.

FMC Corp. should benefit from its strategic investments, acquisitions and efforts to expand its market position and strengthen its portfolio. The company is investing in technologies in its agriculture business and launching new products with a goal to enhance value to the farmers.

Acquisitions and development agreements are also adding strength to the company’s agricultural business. The acquisition of Cheminova has reinforced FMC Corp.'s agriculture business and expanded its access in major agricultural end markets.

Moreover, the recently announced acquisition of a major portion of DuPont's DD Crop Protection business has provided a significant growth platform for FMC’s Agricultural Solutions unit. Under the terms of the agreement, FMC Corp. will buy DuPont's Cereal Broadleaf Herbicides and Chewing Insecticides portfolios as well as some of the latter’s Crop Protection research and development pipeline and organization.

FMC Corp. is also seeing strong demand in its Lithium unit. The company, last year, said that it will triple its lithium hydroxide production capacity by adding 20,000 metric tons per year. It will execute this expansion in three phases over the next few years. The move is based on the growing demand for electric vehicles. The company expects its lithium business to deliver strong earnings growth in 2017.

FMC Corporation Price and EPS Surprise

 

FMC Corporation Price and EPS Surprise | FMC Corporation Quote

Earnings Whispers

Our proven model does not conclusively show that FMC Corp. is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.

Zacks ESP: The Earnings ESP for FMC Corp. is 0.00% as both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at 56 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: FMC Corp. currently carries a Zacks Rank #2, which when combined with a 0.00% ESP, makes surprise prediction difficult.

We caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Other Stocks to Consider

Here are some stocks in the chemicals space that you may want to consider, as our model shows they have the right combination of elements to post an earnings beat this quarter:

The Chemours Company CC has an Earnings ESP of +4.08% and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Westlake Chemical Corporation WLK has an Earnings ESP of +1.25% and carries a Zacks Rank #3.

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E.I. du Pont de Nemours and Company (DD): Free Stock Analysis Report
 
FMC Corporation (FMC): Free Stock Analysis Report
 
Chemours Company (The) (CC): Free Stock Analysis Report
 
Westlake Chemical Corporation (WLK): Free Stock Analysis Report
 
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