FMC Corp (FMC) Cuts Q4 View on North and Latin America Softness

FMC Corporation FMC recently announced that it is reducing its outlook for the fourth-quarter of 2020.

Based on preliminary results, the company expects revenues for fourth quarter to be roughly $1.15 billion, lower than the prior guidance of $1.23-$1.29 billion. The fourth quarter adjusted EBITDA is expected in the range of $285-$295 million compared with the earlier guidance of $335-$355 million.

The free cash flow guidance of $475-$525 million for full-year 2020 remains the same. The company forecasts outlook for 2021 at or roughly above long-range plan targets of 5-7% revenue growth and 7-9% adjusted EBITDA growth.

Sales in North America were affected due to supply chain disruptions, which includes pandemic-related factors linked with logistics and tolling partner, the company noted. Most of these incidents took place in the busy month of December, due to which products were not being delivered to customers by the quarter end. In the first-quarter of 2021, a large proportion of these sales are expected to be realized.

Sales in Brazil were also lower than expected due to severe drought conditions which continued throughout the fourth quarter. This led to reduced demand and the company expects this to continue even through the first quarter of 2021.

Moreover, the substantial product inventory in bonded warehouses of Argentina was not released by custom officials in a timely manner. It is expected to be released and sales to be completed in the first quarter of 2021.

Shares of FMC Corp have gained 18.3% in the past year compared with 24.1% rise of the industry.

Zacks Rank & Key Picks

FMC Corp currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space are Fortescue Metals Group Limited FSUGY, BHP Group BHP and Impala Platinum Holdings Limited IMPUY.

Fortescue has a projected earnings growth rate of 75.5% for the current fiscal. The company’s shares have surged around 122.2% in a year. It currently sports a Zacks Rank #1(Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

BHP has an expected earnings growth rate of 59.5% for the current fiscal. The company’s shares have gained around 29.2% in the past year. It currently flaunts a Zacks Rank #1.

Impala has an expected earnings growth rate of 189.4% for the current fiscal. The company’s shares have rallied around 38% in the past year. It currently sports a Zacks Rank #1.

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