FMC Cuts Outlook as Pricing and Volume Weaken
Adjusted earnings fell 62% to $0.26 a share in the second quarter.
Agricultural-sciences company FMC Corporation (FMC) reported a 17% drop in second-quarter revenue to $867 million as weaker pricing and demand weighed on results. Organic revenue declined 22%, while revenue excluding India fell 20% to $841 million.
The contraction extended across every region and reflected pressure on both sides of the sales equation. Volume fell 10% as diamide-partner orders declined and demand for legacy products weakened, particularly in North America, while pricing decreased 7%. Favorable currency movements added 2%.
Adjusted EBITDA declined 26% to $153 million, outpacing the revenue drop, as lower prices and volume offset reduced costs and a moderate currency benefit. Adjusted EBITDA margin narrowed to about 17.6% from 19.7%, even as gross margin increased to roughly 39.5% from 38.7%.
FMC posted a net loss attributable to shareholders of $186.6 million, or $1.49 a share, compared with net income of $66.7 million, or $0.53 a share, a year earlier. Restructuring and other charges climbed to $222.3 million from $36.7 million, contributing to an operating loss before interest and taxes of $119.7 million.
Growth-portfolio sales provided a partial offset, increasing by a mid-single-digit percentage as new active ingredients and Cyazypyr outweighed lower Plant Health sales. Branded Rynaxypyr sales excluding India were essentially flat.
The company recorded $136.5 million of Project Foundation charges, largely from noncash asset write-offs and accelerated depreciation, along with a $70.6 million receivables write-off tied to a change in its Latin America commercial strategy. Operating cash flow rose to $363 million and free cash flow reached $357.4 million, with both benefiting from a $200 million upfront rimisoxafen licensing payment.
FMC now expects full-year revenue excluding India of $3.50 billion to $3.70 billion and adjusted EBITDA of $620 million to $680 million. Adjusted earnings are projected at $1.19 to $1.49 a share, down 55% at the midpoint, while free-cash-flow guidance increased to $75 million to $225 million and includes the licensing payment.
The company expects third-quarter revenue excluding India to fall 9% and adjusted EBITDA to decline 45% at their respective midpoints, followed by fourth-quarter growth as North American distributors shift orders and Brazil direct-to-grower sales increase. FMC also assembled about $1 billion of expected debt-reduction proceeds through business and property sales, the licensing payment and a Tessenderlo equity investment, concluding the strategic-options review announced in February.