FMC's stock price plummeted after the company lowered its third-quarter performance forecast and made provisions for inventory impairment.

Reuters, October 15 - FMC Corporation (FMC.N) sharply lowered its third-quarter performance expectations on Thursday, after the company reduced prices of distributor inventory products due to falling prices for agricultural chemicals. This caused its stock price to plunge 46% in premarket trading.

The agricultural chemical manufacturer is facing sluggish demand from distributors, as market prices fall and generic drug competition intensifies. This makes it harder to sell high-priced products and leads customers to avoid restocking their inventories.

Details are as follows:

• FMC expects third-quarter revenue to be between $65 million and $125 million, with adjusted EBITDA showing a loss of $510 million to $565 million

• Its third-quarter revenue outlook does not include its India business

• Previously, the company forecast third-quarter revenue, excluding the India business, at $840 million to $900 million, with adjusted EBITDA between $120 million and $140 million

• The revised outlook includes a loss of $625 million to $675 million due to business measures that impacted revenue and adjusted EBITDA

• FMC stated that these business measures include lowering prices of certain products held by distributors in Brazil, Argentina, the US, and Canada

• The company will also comprehensively adjust its US sales model, reducing the gap between total catalogue price and net price after rebates

• These steps aim to clear out high-priced inventory held by channel customers and support distributors' future restocking needs

• FMC expects to remain in compliance with debt covenants as of September 30, but plans to consult with lenders about potential covenant changes over the next year

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