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Why Is Ashland (ASH) Up 14.7% Since Last Earnings Report?
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A month has gone by since the last earnings report for Ashland (ASH - Free Report) . Shares have added about 14.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Ashland 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.
Ashland's Q4 Earnings Miss Estimates, Revenues Meet
Ashland recorded fourth-quarter fiscal 2023 (ending Sep 30, 2023) adjusted earnings of 41 cents per share, down from $1.46 in the prior-year quarter. The bottom line missed the Zacks Consensus Estimate of 47 cents.
Sales were down 17.9% year over year to $518 million. The top line matched the Zacks Consensus Estimate. Sales were affected by lower volumes from customer inventory destocking, partly offset by favorable pricing.
Segment Highlights
Life Sciences: Sales in the segment fell 5% from the prior year to $203 million in the reported quarter, missing Zacks Consensus Estimate of $207 million. The decline is due to weak sales to nutrition customers due to persistent customer destocking. The segment witnessed destocking in most end markets.
Personal Care: Sales in the division fell 22% year over year to $146 million, missing Zacks Consensus Estimate of $150 million. Continuous inventory destocking by customers across end markets more than offset disciplined pricing.
Specialty Additives: Sales in the segment fell 23% year over year to $144 million, missing the Zacks Consensus Estimate of $150 million. Sales were hurt by the customer inventory destocking across end markets.
Intermediates: Sales in the segment went down 42% year over year to $37 million, missing the Zacks Consensus Estimate of $40.36 million. This was affected by lower pricing and volumes of captive and merchant sales.
Balance Sheet
Operating activities generated $294 million in cash flows in fiscal 2023 compared with $193 million a year ago. Ongoing free cash flow was $217 million in the fiscal year, up from $127 million in fiscal 2022.
FY2023 Results
Sales in fiscal 2023 were $2.2 billion, an 8% decrease from the previous year. Sustained pricing and continued demand for pharmaceutical products were more than offset by persistent customer inventory destocking across the majority of other end markets since the beginning of the fiscal year.
Net income was $178 million in the fiscal year, falling from $927 million the previous year. Adjusted EBITDA was $459 million, down 22%.
Outlook
Ashland expects adjusted EBITDA for the first quarter of fiscal 2024 to be in the range of $55 million to $65 million. It anticipates sales for the first quarter to be in the band of $470 million to $490 million.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
The consensus estimate has shifted -77.53% due to these changes.
VGM Scores
At this time, Ashland has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. 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. Notably, Ashland has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Ashland is part of the Zacks Chemical - Specialty industry. Over the past month, Ecolab (ECL - Free Report) , a stock from the same industry, has gained 9.5%. The company reported its results for the quarter ended September 2023 more than a month ago.
Ecolab reported revenues of $3.96 billion in the last reported quarter, representing a year-over-year change of +7.9%. EPS of $1.54 for the same period compares with $1.30 a year ago.
Ecolab is expected to post earnings of $1.53 per share for the current quarter, representing a year-over-year change of +20.5%. Over the last 30 days, the Zacks Consensus Estimate has changed +0.1%.
Ecolab has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.
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Why Is Ashland (ASH) Up 14.7% Since Last Earnings Report?
A month has gone by since the last earnings report for Ashland (ASH - Free Report) . Shares have added about 14.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Ashland 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.
Ashland's Q4 Earnings Miss Estimates, Revenues Meet
Ashland recorded fourth-quarter fiscal 2023 (ending Sep 30, 2023) adjusted earnings of 41 cents per share, down from $1.46 in the prior-year quarter. The bottom line missed the Zacks Consensus Estimate of 47 cents.
Sales were down 17.9% year over year to $518 million. The top line matched the Zacks Consensus Estimate. Sales were affected by lower volumes from customer inventory destocking, partly offset by favorable pricing.
Segment Highlights
Life Sciences: Sales in the segment fell 5% from the prior year to $203 million in the reported quarter, missing Zacks Consensus Estimate of $207 million. The decline is due to weak sales to nutrition customers due to persistent customer destocking. The segment witnessed destocking in most end markets.
Personal Care: Sales in the division fell 22% year over year to $146 million, missing Zacks Consensus Estimate of $150 million. Continuous inventory destocking by customers across end markets more than offset disciplined pricing.
Specialty Additives: Sales in the segment fell 23% year over year to $144 million, missing the Zacks Consensus Estimate of $150 million. Sales were hurt by the customer inventory destocking across end markets.
Intermediates: Sales in the segment went down 42% year over year to $37 million, missing the Zacks Consensus Estimate of $40.36 million. This was affected by lower pricing and volumes of captive and merchant sales.
Balance Sheet
Operating activities generated $294 million in cash flows in fiscal 2023 compared with $193 million a year ago. Ongoing free cash flow was $217 million in the fiscal year, up from $127 million in fiscal 2022.
FY2023 Results
Sales in fiscal 2023 were $2.2 billion, an 8% decrease from the previous year. Sustained pricing and continued demand for pharmaceutical products were more than offset by persistent customer inventory destocking across the majority of other end markets since the beginning of the fiscal year.
Net income was $178 million in the fiscal year, falling from $927 million the previous year. Adjusted EBITDA was $459 million, down 22%.
Outlook
Ashland expects adjusted EBITDA for the first quarter of fiscal 2024 to be in the range of $55 million to $65 million. It anticipates sales for the first quarter to be in the band of $470 million to $490 million.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
The consensus estimate has shifted -77.53% due to these changes.
VGM Scores
At this time, Ashland has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. 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. Notably, Ashland has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Ashland is part of the Zacks Chemical - Specialty industry. Over the past month, Ecolab (ECL - Free Report) , a stock from the same industry, has gained 9.5%. The company reported its results for the quarter ended September 2023 more than a month ago.
Ecolab reported revenues of $3.96 billion in the last reported quarter, representing a year-over-year change of +7.9%. EPS of $1.54 for the same period compares with $1.30 a year ago.
Ecolab is expected to post earnings of $1.53 per share for the current quarter, representing a year-over-year change of +20.5%. Over the last 30 days, the Zacks Consensus Estimate has changed +0.1%.
Ecolab has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.