Why FMC Corporation Plunged Today

Core Viewpoint - FMC Corporation's shares experienced a significant decline of 20.7% following disappointing fourth-quarter earnings and the announcement of exploring strategic options, including a potential sale of the company [1][2]. Financial Performance - In the fourth quarter, FMC reported revenue of $1.08 billion, which is a 12% decrease and below market expectations. Adjusted earnings per share were $1.20, down 33% from the previous year, meeting expectations [3]. - The company's preliminary outlook for 2026 anticipates a further 5% decline in revenue to $3.7 billion, a 17% decline in adjusted EBITDA to $700 million, and a 41% decline in adjusted EPS to $1.76 [5]. Strategic Challenges - FMC is currently facing a difficult agricultural downcycle characterized by overcapacity in agricultural chemicals and low margins for growers. The company's chemical portfolio has largely gone off-patent, necessitating price reductions, which negatively impacts profitability [4]. - FMC's debt stands at $4.07 billion, which is 5.8 times the company's EBITDA guidance for 2026, indicating a high debt-to-profits ratio [4]. Future Outlook - Management projects that its current on-patent chemicals could generate sales of $300 million to $400 million in 2026, representing about 10% of total revenue. These sales are expected to grow to $800 million by 2028, $1 billion by 2030, and $2 billion by 2035 [6].