FMC Q2 Earnings Call Highlights

FMC NYSE: FMC reported second-quarter revenue of $841 million excluding India, below the low end of its guidance range, as cautious customer purchasing, unfavorable weather, low insect pressure and pricing pressure weighed on demand. However, adjusted EBITDA of $153 million exceeded the high end of management’s guidance by 2%, aided by cost discipline and favorable quarter-specific items.

Adjusted earnings per share were $0.26, down 62% from the prior-year period, reflecting lower EBITDA and higher interest expense. Chairman, Chief Executive Officer and President Pierre Brondeau said growers and channel partners continued to manage costs and working capital closely amid weak crop prices, elevated input costs and geopolitical uncertainty.

“Sales were below our expectation as a challenging operating environment, including geopolitical uncertainty, unfavorable weather and low insect pressure created additional pressure on both volume and price,” Brondeau said.

Market conditions pressure sales and pricing

FMC said second-quarter sales, excluding India, declined 1% below the low end of its outlook. The company had anticipated lower orders from diamide partners and registration losses in Europe, the Middle East and Africa, but also faced additional volume headwinds in North America and lower-than-expected demand in EMEA because of excessive heat.

North American performance was a particular negative during the quarter, according to Brondeau. He cited low rice production, weak insect pressure in specialty crops, grower cost-cutting and some switching from branded crop-protection products to generics. FMC also faced price and volume pressure in an herbicide product containing pyroxasulfone after the product’s intellectual property protection expired.

Second-quarter pricing declined somewhat more than FMC’s prior expectation for a mid-single-digit decrease, driven by greater pressure on core legacy products. Pricing pressure was most pronounced in Latin America and, to a lesser extent, Asia, Brondeau said.

Still, the company reported growth in its newer active ingredients and in Cyazypyr. Sales of differentiated Rynaxypyr formulations and mixtures rose more than 35% year over year, while branded diamide sales excluding India were essentially flat. FMC said treated hectares in Brazil increased more than 40%, which management characterized as an encouraging early indicator for its strategy following Rynaxypyr’s patent expiration.

Full-year outlook reduced, with fourth-quarter growth anticipated

FMC reduced its full-year 2026 sales outlook to a range of $3.5 billion to $3.7 billion, representing a 7% decline at the midpoint. The revised view reflects expectations for more pricing pressure and less growth in legacy-product volumes than previously projected.

• Adjusted EBITDA is expected to be $620 million to $680 million, down 23% at the midpoint.
• Adjusted EPS is forecast at $1.19 to $1.49, a 55% decline at the midpoint.
• Price is projected to decline by the mid- to high-single digits for the year.
• Volume is expected to be approximately in line with the prior year, as new active ingredients and direct sales growth in Brazil offset lower diamide-partner orders.

The company expects third-quarter sales of $840 million to $900 million and adjusted EBITDA of $120 million to $140 million. FMC said lower pricing and lower volumes, including order shifts from North American distributors into the fourth quarter, are expected to affect the period.

Management expects a return to year-over-year sales growth in the fourth quarter, forecasting revenue of $1.06 billion to $1.2 billion, up 4% at the midpoint, and adjusted EBITDA of $275 million to $315 million, up 5% at the midpoint. The anticipated fourth-quarter sales improvement is expected to be driven by increased direct and co-op sales in Brazil, new-product demand and the timing shift of North American distributor orders.

Brondeau said FMC expects fourth-quarter cost favorability from cost-mitigation initiatives and lower raw-material costs. CFO Andrew Sandifer added that the third quarter is expected to have relatively flat costs, while the fourth quarter should benefit from stronger year-over-year raw-material purchase-price comparisons.

Debt reduction and liquidity initiatives advance

FMC highlighted several transactions intended to strengthen its balance sheet and generate approximately $1 billion for debt reduction. These include a definitive agreement to sell its India commercial business for $252 million, a $200 million upfront payment from Corteva under a rimisoxafen licensing agreement, a framework agreement involving a Newark, Delaware property for $114 million, and a planned $400 million minority equity investment by Tessenderlo Group.

The company also completed a $1.2 billion senior secured bond offering in May. Proceeds were used to redeem $500 million of senior notes maturing in October and reduce revolver borrowings.

FMC ended the second quarter with gross debt of about $4.3 billion and net debt of approximately $3.8 billion, down $339 million from the prior quarter. Net debt to trailing 12-month EBITDA was 5.1 times. Based on expected free cash flow and proceeds from its planned transactions, management expects year-end net debt of about $2.6 billion, or roughly four times trailing 12-month EBITDA at the midpoint of its guidance.

Second-quarter free cash flow was $357 million, up $318 million from a year earlier. The result included the $200 million Corteva prepayment, as well as lower receivables and lower cash taxes. FMC updated its full-year free-cash-flow outlook to $75 million to $225 million, including approximately $170 million of restructuring spending related largely to changes in its manufacturing and supply network.

Management targets 2027 return to growth

Brondeau said FMC views 2026 as a trough year and expects the company’s operational actions to support a return to growth in 2027. The company is seeking to improve the competitiveness of its core portfolio by exiting production assets that are no longer cost-competitive, transitioning production to lower-cost sources and reducing structural costs.

FMC is also expanding its innovation pipeline. The company secured European Union registration for Isoflex active during the quarter, with launches expected to begin in 2027. Management said it expects new active ingredient sales to accelerate as additional registrations are secured, while partnerships and licensing arrangements can help fund development and generate operating cash flow.

“The work underway in 2026 will position FMC to return to growth as early as 2027 and beyond,” Brondeau said.

About FMC (NYSE:FMC)

FMC Corporation is a global agricultural sciences company specializing in the development, manufacture and marketing of crop protection products. Its portfolio includes herbicides, insecticides, fungicides and plant nutrition solutions designed to enhance crop yield, quality and sustainability. In addition to core crop protection, FMC delivers solutions for turf management and pest control in urban and industrial environments.

Founded in 1883 as the Bean Spray Pump Company and later known as Food Machinery Corporation, the business adopted the FMC name in 1948 and has since evolved through strategic acquisitions and divestitures.

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