Ashland (ASH) earnings beat estimates in first quarter, with revenue lag – February 2, 2022

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Ashland Global Holdings Inc. (ASH Free Report) posted earnings from continuing operations of $32 million or 55 cents per share in the first quarter of fiscal 2022 (ending December 31, 2021), compared to $43 million or 70 cents in the 2020 quarter. last year.

Excluding one-time items, adjusted earnings were 88 cents per share, up from 69 cents in the prior year quarter. It beat Zacks’ consensus estimate by 87 cents.

Sales rose about 9% year-over-year to $512 million, but were below Zacks’ consensus estimate of $512.7 million. Revenue was driven by strong demand in the company’s key global end markets, higher prices and contributions from the acquisition of Schulke & Mayr.

Segment Highlights

Life sciences: Segment sales were flat year-over-year at $170 million in the current quarter. Higher prices and strong demand were offset by delayed shipments of confirmed orders at the end of the quarter.

Personal care : The division’s sales increased 17% year over year to $147 million. Sales were driven by the acquisition of Schulke & Mayr as well as higher demand and prices in key personal care end markets.

Specialty Additives: Segment sales increased 6% year-over-year to $156 million, driven by strong demand and higher prices in all end markets.

Intermediaries: Segment sales increased 61% year-over-year to $53 million, driven by higher prices across all product lines. The company saw an increase in captive and merchant internal product sales thanks to higher prices.

finance

Cash and cash equivalents were $194 million at the end of the quarter, down about 42% year-over-year. Long-term debt was $1,580 million, down about 1% year-over-year.

Cash provided by operating activities was $14 million in the current quarter, compared to $81 million in the prior year quarter. Free cash flow was $26 million in the quarter, compared to $74 million in the prior year quarter.

Outlook

Ashland continues to expect sales of between $2.25 billion and $2.35 billion for fiscal 2022. It also forecasts adjusted EBITDA of between $550 million and $570 million.

The company noted that it considers underlying demand to remain strong and expects its pricing actions to cover expected inflation. He also expects current shipping challenges to continue in the coming quarters. The company remains committed to taking additional steps to recoup any additional cost inflation. It will also continue to proactively build inventory in key regions to mitigate supply chain and shipping headwinds.

Price performance

Shares of Ashland have gained 13.4% over the past year, against an industry decline of 9.6%.

Image source: Zacks Investment Research

Zacks ranking and other key picks

Ashland currently carries a Zacks Rank #3 (Hold).

Top-ranked stocks worth considering in the base materials space include Metal trading company (CMC free report), Albemarle Society (ALB free report) and AdvanSix Inc. (AT SIX free report).

Commercial Metals, sporting a No. 1 (Strong Buy) Zacks rank, has an expected profit growth rate of 62% for the current fiscal year. The Zacks consensus estimate for CMC’s current-year earnings has been revised up 39.5% in the past 60 days. You can see the full list of today’s Zacks #1 Rank stocks here.

Commercial Metals has beaten the Zacks consensus estimate for earnings in three of the past four quarters while missing once. It has a surprise on earnings for the last four quarters of about 13.1% on average. CMC rebounded about 70% in one year.

Albemarle, carrying a No. 1 Zacks rank, has an expected earnings growth rate of 51.3% for the current year. ALB’s consensus estimate for the current year has been revised up 5.4% in the past 60 days.

Albemarle has beaten the Zacks consensus estimate for earnings in each of the past four quarters, averaging 22.1%. ALB shares have gained about 33% in one year.

AdvanSix, carrying a No. 1 Zacks rank, has an expected earnings growth rate of 7.4% for the current year. The Zacks consensus estimate for ASIX earnings for the current year has been revised up 5.3% in the past 60 days.

AdvanSix has beaten the Zacks consensus estimate for earnings in each of the past four quarters, averaging 46.9%. ASIX is up around 83% in one year.

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