TLDR
- FMC Corporation (NYSE: FMC) stock dropped 44% after reporting Q3 earnings with revenue of just $542 million versus analyst expectations of over $1 billion.
- The massive revenue shortfall resulted from one-time actions in India as FMC prepares to sell its India business, which cut reported sales nearly in half.
- FMC posted a GAAP loss of $4.52 per share despite beating adjusted earnings expectations with $0.89 per share.
- The company lowered its full-year 2025 revenue guidance to between $3.9 billion and $4 billion and now expects negative free cash flow up to $200 million.
- FMC’s stock now trades at $16.43 with a market cap around $2.05 billion, near 10-year lows on valuation metrics.
FMC Corporation stock crashed on Thursday morning, dropping 44% to $16.43 per share. The agricultural chemicals company reported third-quarter earnings that shocked Wall Street.
Analysts expected revenue of more than $1 billion for Q3. FMC delivered just $542 million in sales.
The earnings per share picture looked different. FMC beat expectations with adjusted earnings of $0.89 per share versus the $0.86 forecast.
But investors focused on the revenue disaster. The stock collapsed in early trading.
Management quickly addressed the sales miss. Revenue dropped 49% compared to the same quarter last year.
The culprit was India. FMC took one-time actions in its India business as it prepares to sell the unit.
Without these moves, revenue would have been $961 million. That’s still down 10% year over year, but far better than reported.
The India situation created another problem. While adjusted earnings looked okay, GAAP earnings told a darker story.
FMC posted a GAAP loss of $4.52 per share. That’s a brutal number for any quarter.
Kitchen Sink Quarter
The company appears to have dumped all its bad news into one report. This strategy aims to make future quarters look better by comparison.
It’s a common corporate tactic. Get the pain over with all at once.
FMC’s market cap now sits around $2.05 billion. The stock trades near 10-year lows on several valuation metrics.
The price-to-sales ratio hit 0.5. The price-to-book ratio stands at 0.47.
Both metrics hover near decade lows. On paper, the stock looks cheap.
But cheap doesn’t always mean a bargain. Financial health indicators flash warning signs.
The company’s Altman Z-Score sits at 1.69. This places FMC in the distress zone.
FMC’s current ratio of 1.53 shows adequate short-term liquidity. The debt-to-equity ratio of 0.95 indicates moderate leverage.
Downgraded Guidance
FMC slashed its full-year outlook across the board. Revenue guidance now ranges between $3.9 billion and $4 billion.
That represents a 7% decline at the midpoint. Non-GAAP earnings guidance dropped to between $2.92 and $3.14 per share.
The worst news came on cash flow. FMC now expects negative free cash flow for 2025.
The company predicts it could burn as much as $200 million in cash. That’s a red flag for investors.
Revenue over the past three years declined at a 4.6% annual rate. Operating margin stands at 16.78%, down an average of 5.5% per year over five years.
Net margin sits at just 2.42%. These numbers show a company struggling to maintain profitability.
Analyst sentiment remains cautious. The target price of $44.96 sits far above the current trading price.
The recommendation score of 2.6 suggests analysts view the stock as a hold. Technical indicators paint a mixed picture.
The RSI reading of 32.34 suggests the stock approaches oversold territory. Beta stands at 1.18, indicating higher volatility than the broader market.
FMC operates as a pure-play global crop protection company. The portfolio balances across geographies and crop types.
The company focuses on developing new products through its research pipeline. This includes biologicals and other innovations.
Stock volatility remains high at 46.84%. Insider selling has occurred recently, adding to investor concerns.
The Beneish M-Score of -2.3 suggests the company isn’t manipulating its financial statements. At least the books appear clean.
FMC’s third-quarter report shows revenue of $542 million and an adjusted profit of $0.89 per share, while full-year guidance now projects between $3.9 billion and $4 billion in sales with negative free cash flow up to $200 million.
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