FMC first quarter numbers grow on strong pricing, cost discipline

FMC first quarter numbers grow on strong pricing, cost discipline

Adjusted EBITDA of $362 million, up 2 percent versus Q1 2022

  • By ICN Bureau | May 02, 2023
FMC Corporation today reported first quarter 2023 revenue of $1.34 billion, flat versus first quarter 2022, and up 4 percent organically. On a GAAP basis, the company reported earnings of $1.55 per diluted share in the first quarter, a decrease of 6 percent versus first quarter 2022. First quarter adjusted earnings were $1.77 per diluted share, down 6 percent versus first quarter 2022; however, adjusted earnings were $0.02 above the midpoint of the guidance range.
"FMC delivered a solid first quarter with strong pricing actions, growth of new products and cost discipline driving margin expansion. New product growth and expanded market access contributed to robust North America sales, which helped offset volume headwinds in other regions," said Mark Douglas, FMC president and chief executive officer.
First quarter revenue was driven by 7 percent contribution from price, offset by a 3 percent decline in volume and a 4 percent headwind from foreign currencies, especially in EMEA and Asia.
The company is forecasting full-year 2023 revenue to be in the range of $6.08 billion to $6.22 billion, unchanged since the last guidance and representing an increase of 6 percent at the midpoint versus 2022. FMC is raising its full-year adjusted EBITDA guidance by $10 million at the midpoint. Full-year adjusted EBITDA is now expected to be in the range of $1.50 billion to $1.56 billion, representing 9 percent year-over-year growth at the midpoint based on the first quarter performance, continued pricing gains, positive product mix and projected input cost tailwinds. 2023 adjusted earnings range is also increased to $7.34 to $7.94 per diluted share, representing a year-over-year increase of 3 percent at the midpoint. The company is maintaining full-year free cash flow guidance in the range of $530 million to $720 million.
Second quarter revenue is expected to be in the range of $1.42 billion to $1.48 billion, which is flat at the midpoint compared to second quarter 2022. Headwinds from lower volumes in select markets and FX are expected to be offset by gains from pricing actions and sales of new products. Adjusted EBITDA is forecasted to be in the range of $350 million to $370 million, which is flat at the midpoint versus prior-year period. FMC expects adjusted earnings per diluted share to be in the range of $1.66 to $1.86 in the second quarter, which represents a 9 percent decrease at the midpoint versus second quarter 2022 due to higher interest expense. Midpoint of Q2 guidance combined with Q1 actual results implies flat first-half sales, 1 percent increase in first-half EBITDA and 7 percent decrease in first-half EPS compared to the same period last year.
Midpoint of first-half guidance implies a 12 percent increase in second-half sales, a 17 percent increase in second-half EBITDA and a 14 percent increase in second-half EPS compared to the same period last year. Continued market access gains and the increased forecast of new product growth as well as pricing is expected to drive second half revenue growth. Input costs are expected to become a tailwind around the midpoint of the year with a significant benefit from lower costs in the third quarter resulting in a second half that is front loaded on earnings growth.
"We expect second quarter results to be largely in line with the prior year. We are raising our full-year EBITDA guidance, and narrowing our range, based on the first quarter performance and our expectation of continued pricing gains, positive mix supported by new products as well as input cost tailwinds that are projected to be realized in the second half of the year, particularly in the third quarter. The strength of our portfolio, diversity of crop mix and investments in market access have positioned us well to deliver another year of revenue and earnings growth as well as margin expansion," said Douglas.

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