We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Quaker Chemical (KWR) Q1 Earnings and Revenues Top Estimates
Read MoreHide Full Article
Quaker Chemical Corporation (KWR - Free Report) slipped to a loss (attributable to the company) of $28.4 million or $1.60 per share in the first quarter of 2020 from a profit of $13.8 million or $1.03 a year ago.
The bottom line in the reported quarter was hit by an impairment charge of $38 million related to certain intangible assets and a $22.7 million settlement charge associated with the termination of a U.S. defined benefit pension plan.
Barring one-time items, earnings came in at $1.38 per share for the reported quarter, down from $1.41 a year ago. It, however, surpassed the Zacks Consensus Estimate of $1.07.
Net sales surged 79% year over year to roughly $378.6 million in the quarter. It also topped the Zacks Consensus Estimate of $370.1 million. Revenues were boosted by additional sales associated with the company's combination with Houghton International, Inc and the acquisition of the operating divisions of Norman Hay plc.
Quaker Chemical Corporation Price, Consensus and EPS Surprise
The company’s gross profit in the reported quarter climbed around 77% year over year on the back of sales related to Houghton and Norman Hay. Gross margin for the quarter was 35.4%, down from 35.9% a year ago. Gross margin was impacted by price and product mix largely due to reduced gross margins in the legacy Houghton business.
Adjusted EBITDA was $60.5 million for the reported quarter, more than doubling from $29.6 million in the prior-year quarter.
Financials
The company ended the quarter with cash and cash equivalents of around $316.4 million, up more than four fold year over year. Long-term debt was $1,076.3 million, up from $11.7 million a year ago.
Net operating cash flow for the reported quarter was $20.2 million, up around 1% from $20 million in the prior-year quarter.
Outlook
The company anticipates the second quarter to be the most challenging quarter of 2020 as many customers have significantly reduced or shutdown their production. It expects to see an improvement as it progresses through the second half of the year.
The company envisions its second-quarter adjusted EBITDA to be down by nearly half of its first-quarter adjusted EBITDA. It also sees full-year 2020 adjusted EBITDA to be more than $200 million.
Price Performance
The company’s shares are down 23% over a year, compared with the 27.1% growth recorded by its industry.
Zacks Rank & Key Picks
Quaker Chemical currently carries a Zacks Rank #4 (Sell).
Better-ranked stocks worth considering in the basic materials space are Equinox Gold Corp. (EQX - Free Report) , The Scotts Miracle-Gro Company (SMG - Free Report) and Newmont Corporation (NEM - Free Report) .
Scotts Miracle-Gro has an expected earnings growth rate of 17.7% for the current fiscal year. The company’s shares have gained roughly 55% in the past year. It currently carries a Zacks Rank #2.
Newmont has a projected earnings growth rate of 85.6% for the current year. The company’s shares have surged around 107% in a year. It currently has a Zacks Rank #2.
Zacks’ Single Best Pick to Double
From thousands of stocks, 5 Zacks experts each picked their favorite to gain +100% or more in months to come. From those 5, Zacks Director of Research, Sheraz Mian hand-picks one to have the most explosive upside of all.
This young company’s gigantic growth was hidden by low-volume trading, then cut short by the coronavirus. But its digital products stand out in a region where the internet economy has tripled since 2015 and looks to triple again by 2025.
Its stock price is already starting to resume its upward arc. The sky’s the limit! And the earlier you get in, the greater your potential gain.
Image: Bigstock
Quaker Chemical (KWR) Q1 Earnings and Revenues Top Estimates
Quaker Chemical Corporation (KWR - Free Report) slipped to a loss (attributable to the company) of $28.4 million or $1.60 per share in the first quarter of 2020 from a profit of $13.8 million or $1.03 a year ago.
The bottom line in the reported quarter was hit by an impairment charge of $38 million related to certain intangible assets and a $22.7 million settlement charge associated with the termination of a U.S. defined benefit pension plan.
Barring one-time items, earnings came in at $1.38 per share for the reported quarter, down from $1.41 a year ago. It, however, surpassed the Zacks Consensus Estimate of $1.07.
Net sales surged 79% year over year to roughly $378.6 million in the quarter. It also topped the Zacks Consensus Estimate of $370.1 million. Revenues were boosted by additional sales associated with the company's combination with Houghton International, Inc and the acquisition of the operating divisions of Norman Hay plc.
Quaker Chemical Corporation Price, Consensus and EPS Surprise
Quaker Chemical Corporation price-consensus-eps-surprise-chart | Quaker Chemical Corporation Quote
Margins
The company’s gross profit in the reported quarter climbed around 77% year over year on the back of sales related to Houghton and Norman Hay. Gross margin for the quarter was 35.4%, down from 35.9% a year ago. Gross margin was impacted by price and product mix largely due to reduced gross margins in the legacy Houghton business.
Adjusted EBITDA was $60.5 million for the reported quarter, more than doubling from $29.6 million in the prior-year quarter.
Financials
The company ended the quarter with cash and cash equivalents of around $316.4 million, up more than four fold year over year. Long-term debt was $1,076.3 million, up from $11.7 million a year ago.
Net operating cash flow for the reported quarter was $20.2 million, up around 1% from $20 million in the prior-year quarter.
Outlook
The company anticipates the second quarter to be the most challenging quarter of 2020 as many customers have significantly reduced or shutdown their production. It expects to see an improvement as it progresses through the second half of the year.
The company envisions its second-quarter adjusted EBITDA to be down by nearly half of its first-quarter adjusted EBITDA. It also sees full-year 2020 adjusted EBITDA to be more than $200 million.
Price Performance
The company’s shares are down 23% over a year, compared with the 27.1% growth recorded by its industry.
Zacks Rank & Key Picks
Quaker Chemical currently carries a Zacks Rank #4 (Sell).
Better-ranked stocks worth considering in the basic materials space are Equinox Gold Corp. (EQX - Free Report) , The Scotts Miracle-Gro Company (SMG - Free Report) and Newmont Corporation (NEM - Free Report) .
Equinox Gold has a projected earnings growth rate of 231% for the current year. The company’s shares have rallied roughly 44% in a year. It currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Scotts Miracle-Gro has an expected earnings growth rate of 17.7% for the current fiscal year. The company’s shares have gained roughly 55% in the past year. It currently carries a Zacks Rank #2.
Newmont has a projected earnings growth rate of 85.6% for the current year. The company’s shares have surged around 107% in a year. It currently has a Zacks Rank #2.
Zacks’ Single Best Pick to Double
From thousands of stocks, 5 Zacks experts each picked their favorite to gain +100% or more in months to come. From those 5, Zacks Director of Research, Sheraz Mian hand-picks one to have the most explosive upside of all.
This young company’s gigantic growth was hidden by low-volume trading, then cut short by the coronavirus. But its digital products stand out in a region where the internet economy has tripled since 2015 and looks to triple again by 2025.
Its stock price is already starting to resume its upward arc. The sky’s the limit! And the earlier you get in, the greater your potential gain.
Click Here, See It Free >>