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Why Is Huntsman (HUN) Up 6.7% Since Last Earnings Report?
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A month has gone by since the last earnings report for Huntsman (HUN - Free Report) . Shares have added about 6.7% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Huntsman 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 catalysts.
Huntsman's Q3 Earnings and Revenues Miss Estimates
Huntsman’s third-quarter 2023 adjusted earnings per share fell to 15 cents from 71 cents in the year-ago quarter. The bottom line missed the Zacks Consensus Estimate of 19 cents.
Revenues were $1,506 million, down around 25.1% year over year. The top line missed the Zacks Consensus Estimate of $1,562.3 million.
Segment Highlights
Polyurethanes: Revenues from the segment declined 23% year on year to $967 million in the reported quarter, owing to lower MDI average selling prices, fewer sales volumes and an adverse sales mix. It also lagged our estimate of $983 million. Because of less favorable supply and demand dynamics, MDI average selling prices fell in the quarter.
Sales volumes declined predominantly as a result of decreasing demand, particularly in the Americas. The sales mix was unfavorable, with reduced sales of higher-priced products. Lower MDI margins and lower sales volumes led to the drop in segment-adjusted EBITDA, which was somewhat offset by increased equity earnings from our minority-owned joint venture in China.
Performance Products: Revenues plunged 36% to $277 million as a result of lower sales volumes and a decline in average selling prices. It lagged our estimate of $322 million. Sales volumes fell across the board, owing particularly to slower construction activity and lower demand in agrochemicals, coatings and adhesives, fuel and lubricants, and other industrial areas. The drop in segment-adjusted EBITDA was caused primarily by lower sales volumes and average selling prices.
Advanced Materials: Revenues from the unit declined 18% to $268 million due to reduced sales volumes, while average selling prices remained largely steady. It fell short of our estimate of $304.9 million. Sales volumes fell principally as a result of decreasing client demand in infrastructure and industrial areas, as well as the deselection of businesses with lower margins. Lower sales volumes were principally responsible for the fall in segment-adjusted EBITDA.
Financials
Free cash flow from continuing operations was $117 million in the third quarter compared with $228 million in the prior-year quarter. The company had approximately $1.8 billion in combined cash and unused borrowing capacity as of Sep 30, 2023.
The company spent $50 million on capital expenditures from continuing operations in the third quarter compared with $57 million in the prior-year quarter. The company anticipates spending roughly $230 million on capital expenditures in 2023.
Huntsman repurchased approximately 3.8 million shares for roughly $101 million in the third quarter of 2023.
Outlook
Despite challenging market conditions, Huntsman is committed to strategic investments and cost-cutting measures. The company is optimistic about the long-term prospects for its products and anticipates better economic conditions in 2024.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
The consensus estimate has shifted -132.61% due to these changes.
VGM Scores
At this time, Huntsman has a subpar Growth Score of D, a grade with the same score on the momentum front. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Huntsman has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
Performance of an Industry Player
Huntsman belongs to the Zacks Chemical - Diversified industry. Another stock from the same industry, LyondellBasell (LYB - Free Report) , has gained 4.6% over the past month. More than a month has passed since the company reported results for the quarter ended September 2023.
LyondellBasell reported revenues of $10.63 billion in the last reported quarter, representing a year-over-year change of -13.3%. EPS of $2.46 for the same period compares with $1.96 a year ago.
LyondellBasell is expected to post earnings of $1.42 per share for the current quarter, representing a year-over-year change of +10.1%. Over the last 30 days, the Zacks Consensus Estimate has changed +1.1%.
LyondellBasell has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A.
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Why Is Huntsman (HUN) Up 6.7% Since Last Earnings Report?
A month has gone by since the last earnings report for Huntsman (HUN - Free Report) . Shares have added about 6.7% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Huntsman 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 catalysts.
Huntsman's Q3 Earnings and Revenues Miss Estimates
Huntsman’s third-quarter 2023 adjusted earnings per share fell to 15 cents from 71 cents in the year-ago quarter. The bottom line missed the Zacks Consensus Estimate of 19 cents.
Revenues were $1,506 million, down around 25.1% year over year. The top line missed the Zacks Consensus Estimate of $1,562.3 million.
Segment Highlights
Polyurethanes: Revenues from the segment declined 23% year on year to $967 million in the reported quarter, owing to lower MDI average selling prices, fewer sales volumes and an adverse sales mix. It also lagged our estimate of $983 million. Because of less favorable supply and demand dynamics, MDI average selling prices fell in the quarter.
Sales volumes declined predominantly as a result of decreasing demand, particularly in the Americas. The sales mix was unfavorable, with reduced sales of higher-priced products. Lower MDI margins and lower sales volumes led to the drop in segment-adjusted EBITDA, which was somewhat offset by increased equity earnings from our minority-owned joint venture in China.
Performance Products: Revenues plunged 36% to $277 million as a result of lower sales volumes and a decline in average selling prices. It lagged our estimate of $322 million. Sales volumes fell across the board, owing particularly to slower construction activity and lower demand in agrochemicals, coatings and adhesives, fuel and lubricants, and other industrial areas. The drop in segment-adjusted EBITDA was caused primarily by lower sales volumes and average selling prices.
Advanced Materials: Revenues from the unit declined 18% to $268 million due to reduced sales volumes, while average selling prices remained largely steady. It fell short of our estimate of $304.9 million. Sales volumes fell principally as a result of decreasing client demand in infrastructure and industrial areas, as well as the deselection of businesses with lower margins. Lower sales volumes were principally responsible for the fall in segment-adjusted EBITDA.
Financials
Free cash flow from continuing operations was $117 million in the third quarter compared with $228 million in the prior-year quarter. The company had approximately $1.8 billion in combined cash and unused borrowing capacity as of Sep 30, 2023.
The company spent $50 million on capital expenditures from continuing operations in the third quarter compared with $57 million in the prior-year quarter. The company anticipates spending roughly $230 million on capital expenditures in 2023.
Huntsman repurchased approximately 3.8 million shares for roughly $101 million in the third quarter of 2023.
Outlook
Despite challenging market conditions, Huntsman is committed to strategic investments and cost-cutting measures. The company is optimistic about the long-term prospects for its products and anticipates better economic conditions in 2024.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
The consensus estimate has shifted -132.61% due to these changes.
VGM Scores
At this time, Huntsman has a subpar Growth Score of D, a grade with the same score on the momentum front. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Huntsman has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
Performance of an Industry Player
Huntsman belongs to the Zacks Chemical - Diversified industry. Another stock from the same industry, LyondellBasell (LYB - Free Report) , has gained 4.6% over the past month. More than a month has passed since the company reported results for the quarter ended September 2023.
LyondellBasell reported revenues of $10.63 billion in the last reported quarter, representing a year-over-year change of -13.3%. EPS of $2.46 for the same period compares with $1.96 a year ago.
LyondellBasell is expected to post earnings of $1.42 per share for the current quarter, representing a year-over-year change of +10.1%. Over the last 30 days, the Zacks Consensus Estimate has changed +1.1%.
LyondellBasell has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A.