FMC, the Philadelphia-based agricultural science company, experienced a significant decline in sales during the fourth quarter due to destocking patterns and unfavorable weather conditions in Brazil.
Profit Surge: Despite the challenging market conditions, FMC managed to post a profit of $1.1 billion, or $8.77 per share, for the quarter ended December 31. This is in stark contrast to the $273.9 million, or $2.17 per share, recorded in the same period the previous year. Analysts polled by FactSet had anticipated per-share earnings of 89 cents.
Adjusted Earnings Fall Short: Excluding certain one-time items, FMC’s adjusted per-share earnings reached $1.07, slightly below analysts’ projected $1.08, according to FactSet.
Revenue Drop: FMC’s revenue plummeted by 29% to $1.15 billion, falling short of analysts’ expectations of $1.24 billion, as reported by FactSet.
Factors at Play: The drop in organic revenue during the fourth quarter was mainly attributed to a 30% decline compared to the same period the previous year. FMC revealed that volumes decreased by 25% and pricing dropped by 5%, primarily due to ongoing channel destocking across all regions. Additionally, adverse weather patterns in Brazil further hindered the company’s performance.
Revised Outlook: FMC anticipates full-year revenue to range between $4.5 billion and $4.7 billion, indicating a 2.5% growth at the midpoint. This is lower than the initial projection of $4.65 billion to $4.85 billion provided in November. However, analysts surveyed by FactSet are more optimistic, expecting full-year revenue of $4.68 billion.
Adjusted Profit Forecast: FMC expects an adjusted profit per share for the year to fall between $3.23 and $4.41. On the other hand, analysts’ forecast reflects a higher adjusted per-share profit of $4.38.
FMC’s sales struggle in the fourth quarter highlights the impact of destocking patterns and unfavorable weather conditions. While the company managed to achieve a notable profit surge, adjusted earnings fell short of expectations, and revenue experienced a significant decline. FMC remains cautious about its full-year outlook but hopes for a recovery in the coming months.