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Huntsman's (HUN) Q2 Earnings Beat Estimates, Revenues Miss
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Huntsman Corporation (HUN - Free Report) logged a second-quarter 2024 net income of $22 million or 13 cents per share, up from a net income of $19 million or 11 cents in the year-ago quarter.
Barring one-time items, adjusted earnings per share came in at 14 cents in the reported quarter. The figure was higher than the Zacks Consensus Estimate of 12 cents.
Revenues amounted to $1,574 million, down around 1% year over year. The top line missed the Zacks Consensus Estimate of $1,619.9 million.
Huntsman Corporation Price, Consensus and EPS Surprise
Polyurethanes: Revenues in the segment dropped 1% year over year, reaching $1,001 million in the said quarter. It was below our estimate of $1,074.2 million. The decline was primarily due to lower average selling prices of MDI (methylene diphenyl diisocyanate), which were influenced by less favorable supply and demand dynamics. However, the impact was partially mitigated by higher sales volume owing to improved demand and market share gains in certain areas. Reduced MDI prices and lower equity earnings from a minority-owned joint venture in China mainly caused the downtick in the segment’s adjusted EBITDA. This was somewhat offset by reduced raw material costs and increased sales volumes.
Performance Products: Revenues in the segment fell 3% to $299 million, mainly due to a decline in average selling prices. It was below our estimate of $307.3 million. These lower prices were primarily a result of competitive pressures, particularly in Europe and the Americas. On the upside, sales volumes saw an increase, driven by improved industrial activity and heightened demand in the coatings, adhesives and lubricants markets. The decline in the segment’s adjusted EBITDA was largely due to the reduced average selling prices and higher fixed costs. This was partially offset by increased sales volumes and lower raw material costs.
Advanced Materials: Revenues in the segment dropped 2% to $279 million, primarily due to lower average selling prices. It was above our estimate of $266.3 million. The downside was caused by an unfavorable sales mix. Nonetheless, sales volume increased, particularly in the aerospace and infrastructure markets, driven by market recovery. The segment's adjusted EBITDA saw an increase, mainly due to favorable variable margins resulting from lower raw material costs, which were partially offset by higher fixed costs.
Financials
HUN ended the quarter with cash of $335 million, down 33% year over year. Long-term debt was $1,344 million, down 14% year over year.
In second-quarter 2024, net cash provided by operating activities from continuing operations was $55 million. Free cash flow from continuing operations was $5 million.
Outlook
In the second quarter of 2024, sales volumes saw a notable 9% year-over-year increase. The company anticipates favorable growth comparisons to persist in the second half of the year. However, it does not expect the global economic activity to change materially for the remainder of the third quarter.
HUN plans to maintain a focus on cost control, cash flow management and driving stronger sales volumes compared with 2023 levels, with higher overall utilization rates. With a robust balance sheet, the company is committed to a disciplined capital allocation strategy aimed at long-term strengthening of the business and returning cash to shareholders.
Price Performance
Huntsman’s shares have lost 24.5% in the past year compared with a 10% decline of the industry.
The Zacks Consensus Estimate for FNV’s current-year earnings is pegged at $3.27. The consensus estimate for FNV’s earnings has increased by 3% in the past 60 days. FNV beat the consensus estimate in the last four quarters, with the average earnings surprise being 10.5%. It is scheduled to release second-quarter results on Aug 13.
The Zacks Consensus Estimate for Barrick's current-year earnings is pegged at $1.16, indicating a rise of 38.1% from year-ago levels. The consensus estimate for GOLD’s earnings has increased 9% in the past 60 days. GOLD will release second-quarter results on Aug 12.
The Zacks Consensus Estimate for FSM’s current-year earnings is pegged at 54 cents, indicating a year-over-year rise of 145.5%. The consensus estimate for FSM’s earnings has increased by 46% in the past 60 days. The company’s shares have increased 26.7% in the past year. It is slated to report second-quarter results on Aug 7.
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Huntsman's (HUN) Q2 Earnings Beat Estimates, Revenues Miss
Huntsman Corporation (HUN - Free Report) logged a second-quarter 2024 net income of $22 million or 13 cents per share, up from a net income of $19 million or 11 cents in the year-ago quarter.
Barring one-time items, adjusted earnings per share came in at 14 cents in the reported quarter. The figure was higher than the Zacks Consensus Estimate of 12 cents.
Revenues amounted to $1,574 million, down around 1% year over year. The top line missed the Zacks Consensus Estimate of $1,619.9 million.
Huntsman Corporation Price, Consensus and EPS Surprise
Huntsman Corporation price-consensus-eps-surprise-chart | Huntsman Corporation Quote
Segment Highlights
Polyurethanes: Revenues in the segment dropped 1% year over year, reaching $1,001 million in the said quarter. It was below our estimate of $1,074.2 million. The decline was primarily due to lower average selling prices of MDI (methylene diphenyl diisocyanate), which were influenced by less favorable supply and demand dynamics. However, the impact was partially mitigated by higher sales volume owing to improved demand and market share gains in certain areas. Reduced MDI prices and lower equity earnings from a minority-owned joint venture in China mainly caused the downtick in the segment’s adjusted EBITDA. This was somewhat offset by reduced raw material costs and increased sales volumes.
Performance Products: Revenues in the segment fell 3% to $299 million, mainly due to a decline in average selling prices. It was below our estimate of $307.3 million. These lower prices were primarily a result of competitive pressures, particularly in Europe and the Americas. On the upside, sales volumes saw an increase, driven by improved industrial activity and heightened demand in the coatings, adhesives and lubricants markets. The decline in the segment’s adjusted EBITDA was largely due to the reduced average selling prices and higher fixed costs. This was partially offset by increased sales volumes and lower raw material costs.
Advanced Materials: Revenues in the segment dropped 2% to $279 million, primarily due to lower average selling prices. It was above our estimate of $266.3 million. The downside was caused by an unfavorable sales mix. Nonetheless, sales volume increased, particularly in the aerospace and infrastructure markets, driven by market recovery. The segment's adjusted EBITDA saw an increase, mainly due to favorable variable margins resulting from lower raw material costs, which were partially offset by higher fixed costs.
Financials
HUN ended the quarter with cash of $335 million, down 33% year over year. Long-term debt was $1,344 million, down 14% year over year.
In second-quarter 2024, net cash provided by operating activities from continuing operations was $55 million. Free cash flow from continuing operations was $5 million.
Outlook
In the second quarter of 2024, sales volumes saw a notable 9% year-over-year increase. The company anticipates favorable growth comparisons to persist in the second half of the year. However, it does not expect the global economic activity to change materially for the remainder of the third quarter.
HUN plans to maintain a focus on cost control, cash flow management and driving stronger sales volumes compared with 2023 levels, with higher overall utilization rates. With a robust balance sheet, the company is committed to a disciplined capital allocation strategy aimed at long-term strengthening of the business and returning cash to shareholders.
Price Performance
Huntsman’s shares have lost 24.5% in the past year compared with a 10% decline of the industry.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
HUN currently has a Zacks Rank #4 (Sell).
Some better-ranked stocks in the Basic Materials space are Franco-Nevada Corporation (FNV - Free Report) , Barrick Gold Corporation (GOLD - Free Report) and Fortuna Mining Corp. (FSM - Free Report) . Franco-Nevada sports a Zacks Rank #1 (Strong Buy) while Barrick and Fortuna carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for FNV’s current-year earnings is pegged at $3.27. The consensus estimate for FNV’s earnings has increased by 3% in the past 60 days. FNV beat the consensus estimate in the last four quarters, with the average earnings surprise being 10.5%. It is scheduled to release second-quarter results on Aug 13.
The Zacks Consensus Estimate for Barrick's current-year earnings is pegged at $1.16, indicating a rise of 38.1% from year-ago levels. The consensus estimate for GOLD’s earnings has increased 9% in the past 60 days. GOLD will release second-quarter results on Aug 12.
The Zacks Consensus Estimate for FSM’s current-year earnings is pegged at 54 cents, indicating a year-over-year rise of 145.5%. The consensus estimate for FSM’s earnings has increased by 46% in the past 60 days. The company’s shares have increased 26.7% in the past year. It is slated to report second-quarter results on Aug 7.