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Ashland (ASH) Set to Increase Price of Maleic Anhydride

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Ashland Global Holdings Inc. (ASH - Free Report) announced that it will raise the price of maleic anhydride in North America by 4 cents per pound. The price increase will be effective from Feb 19 or as contracts and price agreement permit.

Per the company, the price hike is due to limited supplies and high demand for maleic anhydride. Ashland has encouraged its customers to minimize change orders and extend order lead times that complicate the scheduling of transportation equipment and drivers.

The move represents continued efforts of the company to ensure reliable delivery of maleic anhydride to customers with highest quality material and service levels.

Shares of Ashland have declined 38.1% over a year, significantly underperforming the industry’s 3.7% gain.

 


 

Ashland missed earnings and sales estimates in the first quarter of fiscal 2018 (ended Dec 31, 2017). The company’s adjusted earnings for the first quarter came in at 46 cents per share, which missed the Zacks Consensus Estimate of 47 cents.

Revenues increased roughly 19.6% year over year to $842 million. The figure however, trailed the Zacks Consensus Estimate of $860 million.

Ashland updated its adjusted earnings outlook to a range of $2.90-$3.10 per share for fiscal 2018 due to changes in the company’s effective tax rate for the fiscal. As a result of the recently enacted tax reform, the company raised its effective tax rate expectation for fiscal 2018, which is expected to reduce fiscal 2018 adjusted earnings by roughly 30 cents share.

Ashland expects adjusted earnings for the second quarter of fiscal 2018 in the range of 80-90 cents per share as compared to 70 cents in the prior-year period.

 

 

Zacks Rank & Stocks to Consider

Ashland currently carries a Zacks Rank #5 (Strong Sell).

Some better-ranked stocks in the basic materials space are Methanex Corporation (MEOH - Free Report) , Steel Dynamics, Inc. (STLD - Free Report) and LyondellBasell Industries N.V. (LYB - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Methanex has an expected long-term earnings growth rate of 15%. Its shares soared 28.1% over the last six months.

Steel Dynamics has an expected long-term earnings growth rate of 12%. Its shares have moved up 28.4% in a year’s time.

LyondellBasell has an expected long-term earnings growth rate of 9%. Its shares gained 22.1% over the last six months.

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