Shares of FMC (ticker: FMC) were sinking in premarket trading after the crop-protection company issued a revenue warning and launched a cost structure review ahead of its upcoming earnings report.
Stock Performance
FMC stock experienced a significant drop of 16% to $56 in premarket trading, reflecting investor concern. The company has faced ongoing challenges, with shares plummeting 46% this year.
Adjusted Financial Expectations
FMC provided updated financial forecasts for the upcoming third quarter. The company now expects:
- Third-quarter revenue of $982 million
- Adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) of $175 million
- Adjusted earnings of 44 cents per share
This revised guidance marks a departure from the previous forecast, which projected a revenue range between $1.19 billion to $1.27 billion, adjusted EBITDA ranging from $240 million to $290 million, and adjusted earnings per share ranging between 90 cents and $1.32.
Factors Influencing Guidance
FMC attributes the revised guidance to specific factors impacting sales volumes in Latin America, primarily due to substantial destocking in Brazil and, to a lesser extent, drought conditions in Argentina. A press release from the company provided further details on these challenges.
Revised Outlook and Restructuring Process
The revenue warning for the third quarter has prompted FMC to revise its guidance for the fourth quarter and the full year. The company does not anticipate improvement in destocking conditions in the near future, leading them to initiate an immediate restructuring process for their operations in Brazil. Furthermore, FMC has launched a comprehensive review to adjust the total cost structure of the company.
President and CEO Mark Douglas commented on the situation, stating, “We will discuss these actions and our 2024 outlook at our Investor Day on November 16th.”
In conclusion, the current financial challenges faced by FMC have triggered a substantial drop in stock value. With the implementation of a restructuring process and adjustments to their cost structure, the company aims to navigate these difficulties and provide investors with an updated outlook during their upcoming Investor Day.
