Al Root

Shares of crop chemical maker FMC plunged after the company reported better-than-expected fourth-quarter earnings but provided an outlook for 2025 that disappointed.

The maker of herbicides and insecticides for farmers announced late Tuesday quarterly earnings per share of $1.79 from sales of $1.2 billion. Wall Street was looking for profit of $1.60 a share and revenue of $1.3 billion.

Sales were a little light but earnings were solid. So far so good. But for 2025, the company expects to earn between $3.26 and $3.70 a share. The $3.48 midpoint is flat year over year and below the $4.35 that Wall Street analysts expected.

Shares were down 36.1% in early trading at $34.52. The S&P 500 was down 0.3%, and the Dow Jones Industrial Average was down 0.2%.

"The company needs a stronger reset than what I thought initially," said CEO Pierre Brondeau on the company's fourth-quarter earnings conference call. Brondeau took over in mid-2025.

"It has become clear that we need to take more aggressive actions to reposition FMC," he added. "Above all, we need to significantly lower FMC inventory in the channel much beyond what we were expecting." He also is looking to lower production costs for some of the company's insecticides.

High inventories at chemical sellers mean reduced production and pricing for FMC. The company expects to generate about $4.3 billion in 2025 sales. Wall Street was looking for about $4.4 billion.

Mizuho analyst Edlain Rodriguez wrote in a note Wednesday that some of the company's products are coming off patent, intensifying competition. He rates shares Hold and cut his price target to $51 a share from $55 after earnings.

"Execution and managing through the current challenging environment successfully will be key in regaining credibility," added Rodriguez. "Management won't dispute that it has a lot of work ahead."

It sounds like the stock will be stuck for a while.

Coming into Wednesday, shares have fallen about 11% over the past 12 months.

Overall, 43% of analysts covering FMC rate shares Buy. The average Buy-rating ratio for stocks in the S&P 500 is about 55%. The average analyst price target for FMC shares is about $61.

"We see the print potentially pointing at Latin American volume weakness for Corteva as well, given the two companies have similar Latin American exposure," said Citi analyst Patrick Cunningham in a report.

Corteva stock was down 1.8% at $64.49. Cunningham rates FMC stock Hold and has a $61 price target for shares. He rates Corteva stock Buy and has a $71 price target on the shares.

Write to Al Root at allen.root@dowjones.com

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February 05, 2025 10:03 ET (15:03 GMT)

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