Shares of agricultural chemicals producer FMC Corporation (FMC +2.25%) plunged 71.5% in 2025, according to data from S&P Global Market Intelligence.
FMC's year went from bad to worse, as CEO Pierre Brondeau, who was brought back out of retirement in mid-2024, declared a "reset year" for the chemicals company in 2025, and likely 2026 as well.
Some of FMC's higher-margin chemicals have gone off-patent or will soon be off-patent, leading to increased pricing pressure from generic competition. When combined with high interest rates affecting customers' ability to pay in the important South American region, FMC's revenue, profits, and cash flow all decreased over the course of the year.
The question for investors is whether the bottom is in and a potential turnaround may be in the cards, or whether the stock is a value trap.
NYSE: FMC
Key Data Points
Profit declines, divestitures, and cost cuts as FMC retrenches
The significant declines in FMC's stock occurred after its fourth-quarter 2024 report in February and again after its third-quarter 2025 earnings report in late October, when the company also announced a substantial 86% reduction to its dividend.
In February, FMC missed revenue expectations and gave a full-year revenue guidance range of $4.15 billion to $4.35 billion, which was particularly disappointing given the $4.40 billion analyst consensus at the time. Management emphasized that it would take aggressive pricing actions to counter competition from generic brands, while also cutting costs and investing in direct sales to large growers in South America, bypassing distributors.
As a result of the stock decline, FMC was removed from the S&P 500 index to make room for companies that had grown to a larger size.
However, things went from bad to much, much worse in October, when FMC made several announcements on its third-quarter earnings release.
First, management officially put FMC's India business up for sale, resulting in a significant accounting adjustment to revenue that caused a 49% decline in headline numbers. Even adjusting for the accounting change, revenue was down 10% for the quarter. Additionally, FMC lowered its outlook for free cash flow to a range of ($200 million) to $0, due to lingering cash collection issues in South America.
As a result of the continued headwinds, management reduced FMC's dividend from $0.58 to $0.08 in order to preserve cash, with the aim of paying down the company's more than $4.5 billion in debt as of the third quarter.
Image source: Getty Images.
Where does FMC go from here?
Value investors may be circling FMC, and this investor has recently taken a small speculative position in the name.
Some key factors to watch this year will be the price at which FMC can sell its India business, as well as whether it improves its cash collections to improve cash flow. Crop prices will play a role in this, as farmers struggling under the weight of an agricultural downturn will have a hard time affording new insecticides, fungicides, and herbicides.
FMC is also consolidating its manufacturing operations into lower-cost sites, which management expects to complete by the end of 2026. Therefore, look for additional restructuring costs in that area.
While management does not expect new patent-protected products to ramp until 2028, if that happens, revenue and margins could expand again. However, until then, FMC may struggle as it must compete on price while operating in a cyclical industry. Therefore, while there is significant upside potential if the company can navigate the next two years, there may be more struggles between now and then.
