Shares of pesticide maker FMC Corp. fell the most since October after reporting disappointing fourth-quarter earnings and signaling a slower-than-expected recovery this year, according to Bloomberg.
The stock dropped as much as 14% to mark the biggest decline among companies in the S&P 500 index. The plunge came after the Philadelphia-based company posted earnings on Feb. 5 after the market closed, with results missing analysts’ estimates.
FMC’s results epitomize the challenges faced by crop chemical producers and especially those with business heavily weighted in Brazil, the world’s largest soybean and corn exporter. The combination of a glut of high-cost inventories held by distributors and adverse weather has eroded sales of agriculture products.
It may take “well into 2024” for FMC to work through excess stock, with “more normal market conditions” expected next year and in 2026, CEO Mark Douglas said in a Feb. 6 call with analysts.
The earnings report showed a 25% drop in fourth-quarter sales volume and a 5% decline in prices, both more than analysts expected. FMC said it expects per-share adjusted earnings of $3.23-$4.41 for the full year, trailing the midpoint of average of analysts’ estimates. FMC’s adjusted EBITDA fell 41% for the fourth quarter and 30% for the full year.
FMC’s results contrast with rival Corteva Inc., which saw its shares surge by the most ever earlier this month as it predicted improvements within the crop protection industry. Corteva’s operating EBITDA was up 5% for the year.
Douglas said FMC is nearly finished downsizing operations in Brazil as part of a broader restructuring aimed at saving $150 million through 2025. About 8% of FMC’s workforce will be impacted by the consolidation of roles and reduced team structures, he said.