Why Chemical Company FMC's Shares Are Plummeting Today

Chemical manufacturing company FMC Corp's FMC shares are plunging after the company updated its third-quarter and FY23 outlook.

The company now expects its Q3 revenue to be $982 million, down from the previous $1.19 billion - $1.27 billion, and against the estimate of $1.21 billion.

The adjusted EPS for Q3 is expected to be $0.44, down from the prior outlook of $0.90 - $1.32, against the $1.02 estimate.

The company forecasts Q3 Adjusted EBITDA of $175 million, down from $240 million - $290 million expected earlier.

The revised outlook is mainly driven by substantially lower sales volumes in Latin America, particularly destocking in Brazil and to a lesser degree drought in Argentina. 

FMC has also revised FY23 revenue outlook to $4.480 billion - $4.720 billion from $5.20 billion - $5.40 billion versus the estimate of $5.23 billion. Adjusted EBITDA has been lowered to $970 million - $1.030 billion from $1.30 billion - $1.40 billion.

The company also cut Q4 revenue outlook to $1.139 billion - $1.379 billion from $1.66 billion - $1.78 billion versus the consensus estimate of $1.67 billion. Adjusted EBITDA of $246 million - $306 million from $511 million - $561 million.

"During the third quarter we observed continued channel destocking in all regions; however, the magnitude of the destocking in Brazil was much greater than we had anticipated," said President and CEO Mark Douglas.

"With destocking conditions not expected to improve in the near-term, we have initiated an immediate restructuring process for our operations in Brazil and have launched a broader, more comprehensive process to review and adjust our total Company cost structure."

Price Action: FMC shares are trading lower by 16% at $56.19 on the last check Monday.