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Why Is Element Solutions (ESI) Up 5.8% Since Last Earnings Report?
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It has been about a month since the last earnings report for Element Solutions (ESI - Free Report) . Shares have added about 5.8% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Element Solutions 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 drivers.
Element Solutions’ Q4 Earnings Meet Estimate, Sales Up Y/Y
Element Solutions recorded earnings (as reported) from continuing operations of 12 cents per share in fourth-quarter 2020 compared with 29 cents in the year-ago quarter.
Adjusted earnings per share (EPS) of 31 cents for the quarter were in line with the Zacks Consensus Estimate.
The company generated net sales of $536.6 million, up around 18% year over year. Organic net sales, barring the impact of currency changes, specific pass-through metal prices and acquisitions, rose 10% year over year.
The company saw a rebound in its industrially oriented businesses in the fourth quarter. Its high-end electronics business also continued its momentum in the quarter. Element Solutions witnessed record net sales and adjusted EBITDA in the fourth quarter since its launch in February 2019.
Segment Highlights
Net sales in the Electronics segment rose 26% year over year to $343 million in the reported quarter. Organic net sales increased 16% from the year-ago quarter’s reported figure. Adjusted EBITDA was $81 million, up 30% year over year.
Net sales in the Industrial & Specialty unit went up 6% year over year to $193 million. Organic net sales moved up 1% year over year. Adjusted EBITDA in the segment was $45 million, up 13% year over year.
FY20 Results
Earnings (as reported) for full-year 2020 were 30 cents per share compared with 35 cents per share a year ago. Net sales inched up 1% year over year to $1.85 billion.
Financial Position
Element Solutions ended the year with cash and cash equivalents of $291.9 million, up 53.6% year over year. Long-term debt was $1,508.1 million at the end of the year, down 0.3% year over year.
The company generated cash flows from operating activities of $81.7 million in the reported quarter. Free cash flows for the quarter were $75 million.
Outlook
The company expects adjusted EBITDA growth of around 7% year over year in 2021. The company is also projecting a 15-20% increase in adjusted EPS to the range of $1.10-1.15. Moreover, it anticipates generating free cash flow of roughly $275 million for 2021.
Element Solutions believes that 2021 could be a record year for its business. It expects full year cash flow generation to be a record, which will provide flexibility for additional capital deployment toward acquisitions, share repurchases and potentially increased dividends.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.
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Why Is Element Solutions (ESI) Up 5.8% Since Last Earnings Report?
It has been about a month since the last earnings report for Element Solutions (ESI - Free Report) . Shares have added about 5.8% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Element Solutions 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 drivers.
Element Solutions’ Q4 Earnings Meet Estimate, Sales Up Y/Y
Element Solutions recorded earnings (as reported) from continuing operations of 12 cents per share in fourth-quarter 2020 compared with 29 cents in the year-ago quarter.
Adjusted earnings per share (EPS) of 31 cents for the quarter were in line with the Zacks Consensus Estimate.
The company generated net sales of $536.6 million, up around 18% year over year. Organic net sales, barring the impact of currency changes, specific pass-through metal prices and acquisitions, rose 10% year over year.
The company saw a rebound in its industrially oriented businesses in the fourth quarter. Its high-end electronics business also continued its momentum in the quarter. Element Solutions witnessed record net sales and adjusted EBITDA in the fourth quarter since its launch in February 2019.
Segment Highlights
Net sales in the Electronics segment rose 26% year over year to $343 million in the reported quarter. Organic net sales increased 16% from the year-ago quarter’s reported figure. Adjusted EBITDA was $81 million, up 30% year over year.
Net sales in the Industrial & Specialty unit went up 6% year over year to $193 million. Organic net sales moved up 1% year over year. Adjusted EBITDA in the segment was $45 million, up 13% year over year.
FY20 Results
Earnings (as reported) for full-year 2020 were 30 cents per share compared with 35 cents per share a year ago. Net sales inched up 1% year over year to $1.85 billion.
Financial Position
Element Solutions ended the year with cash and cash equivalents of $291.9 million, up 53.6% year over year. Long-term debt was $1,508.1 million at the end of the year, down 0.3% year over year.
The company generated cash flows from operating activities of $81.7 million in the reported quarter. Free cash flows for the quarter were $75 million.
Outlook
The company expects adjusted EBITDA growth of around 7% year over year in 2021. The company is also projecting a 15-20% increase in adjusted EPS to the range of $1.10-1.15. Moreover, it anticipates generating free cash flow of roughly $275 million for 2021.
Element Solutions believes that 2021 could be a record year for its business. It expects full year cash flow generation to be a record, which will provide flexibility for additional capital deployment toward acquisitions, share repurchases and potentially increased dividends.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.