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Why Is Element Solutions (ESI) Down 5.4% Since Last Earnings Report?
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A month has gone by since the last earnings report for Element Solutions (ESI - Free Report) . Shares have lost about 5.4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Element Solutions 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 catalysts.
Element Solutions’ Q4 Earnings and Revenues Beat Estimate
Element Solutions recorded earnings (as reported) from continuing operations of a penny per share in fourth-quarter 2021 compared with 12 cents in the year-ago quarter.
Adjusted earnings per share (EPS) totalled 31 cents in the quarter, which beat the Zacks Consensus Estimate of 29 cents.
The company generated net sales of $646.9 million, up around 21% year over year. The figure beat the Zacks Consensus Estimate of $597.5 million.
Segment Highlights
Net sales in the Electronics segment rose 16% year over year to $400 million in the reported quarter. Organic net sales inched up 1% from the year-ago quarter’s reported figure. Adjusted EBITDA was $80 million, down 1% year over year.
Net sales in the Industrial & Specialty unit rose 28% year over year to $247 million. Organic net sales moved up 4% year over year. Adjusted EBITDA in the segment was $43 million, down 5% year over year.
FY21 Results
Earnings (as reported) for full-year 2021 were 82 cents per share compared with 30 cents per share a year ago. Net sales rose 29.5% year over year to $2,399.8 million.
Financial Position
Element Solutions ended the year with cash and cash equivalents of $330.1 million, up 13.1% year over year. Long-term debt was $1,894.2 million at the end of the year, up 25.6% year over year.
The company generated cash flows from operating activities of $326 million in 2021. Free cash flows in the quarter were $280 million, up 12% year over year.
Outlook
The company expects adjusted EBITDA in the range of $575-$590 million in 2022. The company is also projecting adjusted EPS in the range of $1.55-1.60. ESI anticipates generating free cash flow between $310-$325 million for 2022.
Element Solutions expects that 2022 could be a record year for its business. It also forecasts first-quarter 2022 adjusted EBITDA to be roughly flat year-on-year at constant currency.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
VGM Scores
At this time, Element Solutions has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. 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. Notably, Element Solutions has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is Element Solutions (ESI) Down 5.4% Since Last Earnings Report?
A month has gone by since the last earnings report for Element Solutions (ESI - Free Report) . Shares have lost about 5.4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Element Solutions 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 catalysts.
Element Solutions’ Q4 Earnings and Revenues Beat Estimate
Element Solutions recorded earnings (as reported) from continuing operations of a penny per share in fourth-quarter 2021 compared with 12 cents in the year-ago quarter.
Adjusted earnings per share (EPS) totalled 31 cents in the quarter, which beat the Zacks Consensus Estimate of 29 cents.
The company generated net sales of $646.9 million, up around 21% year over year. The figure beat the Zacks Consensus Estimate of $597.5 million.
Segment Highlights
Net sales in the Electronics segment rose 16% year over year to $400 million in the reported quarter. Organic net sales inched up 1% from the year-ago quarter’s reported figure. Adjusted EBITDA was $80 million, down 1% year over year.
Net sales in the Industrial & Specialty unit rose 28% year over year to $247 million. Organic net sales moved up 4% year over year. Adjusted EBITDA in the segment was $43 million, down 5% year over year.
FY21 Results
Earnings (as reported) for full-year 2021 were 82 cents per share compared with 30 cents per share a year ago. Net sales rose 29.5% year over year to $2,399.8 million.
Financial Position
Element Solutions ended the year with cash and cash equivalents of $330.1 million, up 13.1% year over year. Long-term debt was $1,894.2 million at the end of the year, up 25.6% year over year.
The company generated cash flows from operating activities of $326 million in 2021. Free cash flows in the quarter were $280 million, up 12% year over year.
Outlook
The company expects adjusted EBITDA in the range of $575-$590 million in 2022. The company is also projecting adjusted EPS in the range of $1.55-1.60. ESI anticipates generating free cash flow between $310-$325 million for 2022.
Element Solutions expects that 2022 could be a record year for its business. It also forecasts first-quarter 2022 adjusted EBITDA to be roughly flat year-on-year at constant currency.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
VGM Scores
At this time, Element Solutions has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. 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. Notably, Element Solutions has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.