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Olin (OLN) Up 7.9% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for Olin (OLN - Free Report) . Shares have added about 7.9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Olin due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Olin's Earnings and Revenues Beat Estimates in Q3
Olin slipped to a loss of $736.8 million or $4.67 per share in third-quarter 2020 from a profit of $44.2 million or 27 cents per share a year ago.
Excluding one-time items, adjusted loss for the quarter was 20 cents per share, narrower than the Zacks Consensus Estimate of a loss of 23 cents.
The company’s revenues fell roughly 9% year over year to $1,437.6 million in the quarter. It, however, surpassed the Zacks Consensus Estimate of $1,395.5 million. Weaker year-over-year pricing and volumes hurt sales across the Chlor Alkali Products & Vinyls and Epoxy segments in the quarter.
Segment Review
Chlor Alkali Products and Vinyls: Revenues at the division fell roughly 14% year over year to $755.1 million in the reported quarter on reduced volumes and lower caustic soda and ethylene dichloride pricing.
Epoxy: Revenues at the division dropped around 7% year over year to $476.1 million on reduced epoxy resin volumes and lower product prices.
Winchester: Revenues rose around 9% year over year to $206.4 million on increased commercial ammunition sales.
Financials
Olin ended the quarter with cash and cash equivalents of $282.7 million, up roughly 59% year over year. Long-term debt was $3,959.5 million at the end of the quarter, up around 19% year over year.
Outlook
Olin said that it saw sequential pricing improvement in the third quarter for chlorine and almost all chlorine derivatives and its newly established Electrochemical Unit (“ECU”). The company expects its recent price increases for chlorine, epoxy resins, ethylene dichloride, bleach and chlorinated organics to favorably contribute to ECU profit contribution index in the fourth quarter. However, Olin envisions volumes in the fourth quarter to be challenged on customer year-end inventory reductions and the company selectively selling less into poor quality markets.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month. The consensus estimate has shifted 20.95% due to these changes.
VGM Scores
At this time, Olin has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Olin has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Olin (OLN) Up 7.9% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Olin (OLN - Free Report) . Shares have added about 7.9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Olin due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Olin's Earnings and Revenues Beat Estimates in Q3
Olin slipped to a loss of $736.8 million or $4.67 per share in third-quarter 2020 from a profit of $44.2 million or 27 cents per share a year ago.
Excluding one-time items, adjusted loss for the quarter was 20 cents per share, narrower than the Zacks Consensus Estimate of a loss of 23 cents.
The company’s revenues fell roughly 9% year over year to $1,437.6 million in the quarter. It, however, surpassed the Zacks Consensus Estimate of $1,395.5 million. Weaker year-over-year pricing and volumes hurt sales across the Chlor Alkali Products & Vinyls and Epoxy segments in the quarter.
Segment Review
Chlor Alkali Products and Vinyls: Revenues at the division fell roughly 14% year over year to $755.1 million in the reported quarter on reduced volumes and lower caustic soda and ethylene dichloride pricing.
Epoxy: Revenues at the division dropped around 7% year over year to $476.1 million on reduced epoxy resin volumes and lower product prices.
Winchester: Revenues rose around 9% year over year to $206.4 million on increased commercial ammunition sales.
Financials
Olin ended the quarter with cash and cash equivalents of $282.7 million, up roughly 59% year over year. Long-term debt was $3,959.5 million at the end of the quarter, up around 19% year over year.
Outlook
Olin said that it saw sequential pricing improvement in the third quarter for chlorine and almost all chlorine derivatives and its newly established Electrochemical Unit (“ECU”). The company expects its recent price increases for chlorine, epoxy resins, ethylene dichloride, bleach and chlorinated organics to favorably contribute to ECU profit contribution index in the fourth quarter. However, Olin envisions volumes in the fourth quarter to be challenged on customer year-end inventory reductions and the company selectively selling less into poor quality markets.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month. The consensus estimate has shifted 20.95% due to these changes.
VGM Scores
At this time, Olin has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Olin has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.