It has been about a month since the last earnings report for Ingevity (NGVT Quick QuoteNGVT - Free Report) . Shares have lost about 7.4% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Ingevity due for a breakout? 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.

Ingevity's Earnings and Revenues Miss Estimates in Q2

Ingevity recorded a second-quarter 2024 loss of $283.7 million or a loss of $7.81 per share. In the year-ago quarter, it posted a profit of $35.5 million or 97 cents.

Excluding one-time items, adjusted earnings in the quarter were $1.01, down from $1.41 a year ago. The figure missed the Zacks Consensus Estimate of $1.05.

The company’s revenues declined 18.9% year over year to $390.6 million in the quarter, missing the Zacks Consensus Estimate of $415.5 million. The top-line downtick was the result of the Performance Chemicals segment's repositioning, which included limiting exposure to specific markets within the Industrial Specialties product line. Higher sales in Performance Materials due to increased pricing and strong automotive carbon volumes offset the decline.

Segmental Review

The Performance Chemicals division generated revenues of $185.5 million in the reported quarter, declining around 34.7% year over year. The reported figure missed the Zacks Consensus Estimate of $215.9 million.

Revenues in the Performance Materials unit rose around 8.7% year over year to $157.2 million. The figure topped the Zacks Consensus Estimate of $150.4 million.

Sales in the Advanced Polymer Technologies segment were down 9.9% to $47.9 million. The Zacks Consensus Estimate for the same was $49.2 million.

Financials

Ingevity ended the quarter with cash and cash equivalents of $107.4 million, up around 57.9% year over year. The long-term debt was $1,401 million, down 8.1% year over year.

The operating cash flow was $29.7 million for the reported quarter, down around 38.6% year over year.

Outlook

The company revised its sales guidance for 2024 to $1.4-$1.5 billion and adjusted its EBITDA outlook to $350-$360 million.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates revision.

The consensus estimate has shifted -40.24% due to these changes.

VGM Scores

At this time, Ingevity has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. 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 Ingevity has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.

Performance of an Industry Player

Ingevity belongs to the Zacks Chemical - Specialty industry. Another stock from the same industry, Ecolab (ECL Quick QuoteECL - Free Report) , has gained 4.1% over the past month. More than a month has passed since the company reported results for the quarter ended June 2024.

Ecolab reported revenues of $3.99 billion in the last reported quarter, representing a year-over-year change of +3.5%. EPS of $1.68 for the same period compares with $1.24 a year ago.

Ecolab is expected to post earnings of $1.81 per share for the current quarter, representing a year-over-year change of +17.5%. Over the last 30 days, the Zacks Consensus Estimate has changed +1.2%.

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 C.