FMC Corporation raises full-year 2020 guidance following a solid second quarter result

Date:08-05-2020

Second Quarter 2020 Highlights

- Revenue of $1.16 billion, down 4 percent versus Q2 2019, up 3 percent organically¹

- Consolidated GAAP net income of $185 million, up 5 percent versus Q2 2019

- Adjusted EBITDA of $341 million, up 1 percent versus Q2 2019

- Consolidated GAAP earnings of $1.41 per diluted share, up 7 percent versus Q2 2019

- Consolidated adjusted earnings per diluted share of $1.72, up 4 percent versus Q2 2019

Full-Year Outlook Highlights²

- Revenue outlook range of $4.68 to $4.82 billion, reflecting 3 percent growth at the midpoint versus 2019 and 9 percent organic growth¹

- Raising adjusted EBITDA outlook to a range of $1.265 to $1.325 billion, reflecting 6 percent growth at the midpoint versus 2019

- Raising adjusted earnings guidance to a range of $6.28 to $6.62 per diluted share, reflecting 6 percent growth at the midpoint versus 2019

FMC Corporation (NYSE: FMC) Tuesday reported second quarter 2020 revenue of approximately $1.16 billion, a decrease of 4 percent versus second quarter 2019. Excluding the impact of foreign currencies, organic sales grew 3 percent year over year. On a GAAP basis, the company reported earnings of $1.41 per diluted share in the second quarter, an increase of 7 percent versus second quarter 2019. Second quarter adjusted earnings were $1.72 per diluted share, an increase of 4 percent versus second quarter 2019, and 6 cents above the midpoint of guidance.

Mark Douglas, FMC president and CEO said: "FMC delivered solid financial performance despite challenging global conditions that included severe headwinds from foreign currencies, impacts from COVID-19, and adverse weather in Europe. FMC's geographic balance, strength in demand for our product portfolio and pricing actions all contributed to earnings growth in the quarter, as did the proactive cost controls implemented at the outset of the pandemic."

FMC revenue decline was driven by a 7 percent headwind from foreign currencies, offset partially by a 2 percent contribution from volume and a 1 percent contribution from price. Latin America sales grew 2 percent year over year, and 24 percent excluding FX headwinds. Pricing helped offset some of the FX headwinds, while the underlying volume gains came from strong herbicide and insecticide sales in Argentina and robust sales for sugarcane applications in Brazil. In Asia, revenue increased 2 percent year over year, and 8 percent excluding FX. Volume growth in India, Pakistan and Australia, as well as modest pricing across the region, were mostly offset by FX headwinds. In North America, sales decreased 6 percent year over year, driven primarily by our planned activities to reduce channel inventories of pre-emergent herbicides, partially offset by strong insecticide sales.  Sales in EMEA decreased 13 percent year over year and decreased 10 percent excluding FX, due to poor weather conditions in Northern and Eastern Europe as well as forecasted registration losses and product rationalizations.

2020 Outlook²

The company is forecasting full-year 2020 revenue to be in the range of $4.68 billion to $4.82 billion, representing an increase of 3 percent at the midpoint versus 2019. Organic growth is expected to be 9 percent, which is 1 percent higher than the prior guidance. Full-year adjusted EBITDA is now expected to be in the range of $1.265 billion to $1.325 billion, representing 6 percent year-over-year growth at the midpoint and an increase of 1 percent versus prior guidance. 2020 adjusted earnings are now expected to be in the range of $6.28 to $6.62 per diluted share, representing a year-over-year increase of 6 percent at the midpoint and 7 cents higher than prior forecast. Full-year earnings growth drivers include volume in Latin America and Asia Pacific, pricing and continued cost discipline. 

"While we expect continued challenges related to the global pandemic and foreign currency headwinds throughout 2020, we are more confident in our outlook for the remainder of the year and are raising the midpoints of our EBITDA and EPS guidance," said Douglas.

Third and Fourth Quarter Outlook²

Third quarter revenue is expected to be in the range of $1.045 billion to $1.105 billion, representing a 6 percent increase at the midpoint compared to third quarter 2019, and organic growth of 12 percent excluding foreign currency headwinds. Adjusted EBITDA is forecasted to be in the range of $233 million to $257 million, representing a 12 percent increase at the midpoint versus Q3 2019. FMC expects adjusted earnings per diluted share to be in the range of $1.03 to $1.17 in the third quarter, which is an increase of 17 percent at the midpoint versus Q3 2019.

Fourth quarter revenue is expected to be in the range of $1.23 billion to $1.31 billion, representing a 6 percent increase at the midpoint compared to fourth quarter 2019, and organic growth of 11 percent excluding foreign currency headwinds. Adjusted EBITDA is forecasted to be in the range of $335 million to $371 million, representing a 10 percent increase at the midpoint versus Q4 2019. FMC expects adjusted earnings per diluted share to be in the range of $1.71 to $1.91 in the fourth quarter, which represents growth of 3 percent at the midpoint versus Q4 2019.

1. Organic revenue growth (non-GAAP) excludes the impact of foreign currency changes.

2. Although FMC provides forecasts for adjusted earnings per share and adjusted EBITDA (non-GAAP financial measures), they are not able to forecast the most directly comparable measures calculated and presented in accordance with GAAP. Certain elements of the composition of the GAAP amounts are not predictable, making it impractical for us to forecast. Such elements include, but are not limited to, restructuring, acquisition charges, and discontinued operations. As a result, no GAAP outlook is provided.