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Ashland (ASH) Down 6.4% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for Ashland (ASH - Free Report) . Shares have lost about 6.4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Ashland 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.
Ashland's Earnings and Sales Miss Estimates in Q3
Ashland recorded third-quarter fiscal 2023 (ending Jun 30, 2023) adjusted earnings of $1.23 per share, down from $1.89 in the prior-year quarter. The bottom line missed the Zacks Consensus Estimate of $1.40.
Sales were down 15% year over year to $546 million. The top line missed the Zacks Consensus Estimate of $547.2 million. The sales were adversely impacted by lower volumes from customer inventory de-stocking, partly offset by favorable pricing.
Segment Highlights
Life Sciences: Sales in the segment fell 4% from the prior year to $219 million in the reported quarter, with pharmaceutical clients experiencing an increase due to improved mix and cost recovery. Customers de-stocking in nutrition and nutraceutical ingredients more than offset this growth. The figure missed our estimate of $242.5 million.
Personal Care: Sales in the division fell 15% year over year to $146 million. Continuous inventory de-stocking by customers serving the personal-care end markets more than offset disciplined pricing across end markets. The figure missed our estimate of $173.5 million.
Specialty Additives: Sales in the segment fell 22% year over year to $152 million, hurt by the inventory de-stocking that more than offset sustained inflation recovery. The figure missed our estimate of $163.9 million.
Intermediates: Sales in the segment went down 41% year over year to $43 million, affected by lower pricing and volumes of captive butanediol and merchant-derivatives sales. The figure missed our estimate of $56.4 million.
Financials
Operating activities generated $137 million in cash flows in the reported quarter against usage of $17 million in the same period last year. Ongoing free cash flow was $97 million, up from $13 million.
Outlook
Ashland expects continued customer de-stocking and external uncertainties for the remainder of fiscal 2023. The company expects adjusted EBITDA for the fiscal year to be roughly $500 million. It estimates sales for fiscal 2023 to be around $2.2 billion.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -24.02% due to these changes.
VGM Scores
Currently, Ashland has a poor Growth Score of F, however its Momentum Score is doing a lot better with a C. Following the exact same course, 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 Ashland has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
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Ashland (ASH) Down 6.4% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Ashland (ASH - Free Report) . Shares have lost about 6.4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Ashland 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.
Ashland's Earnings and Sales Miss Estimates in Q3
Ashland recorded third-quarter fiscal 2023 (ending Jun 30, 2023) adjusted earnings of $1.23 per share, down from $1.89 in the prior-year quarter. The bottom line missed the Zacks Consensus Estimate of $1.40.
Sales were down 15% year over year to $546 million. The top line missed the Zacks Consensus Estimate of $547.2 million. The sales were adversely impacted by lower volumes from customer inventory de-stocking, partly offset by favorable pricing.
Segment Highlights
Life Sciences: Sales in the segment fell 4% from the prior year to $219 million in the reported quarter, with pharmaceutical clients experiencing an increase due to improved mix and cost recovery. Customers de-stocking in nutrition and nutraceutical ingredients more than offset this growth. The figure missed our estimate of $242.5 million.
Personal Care: Sales in the division fell 15% year over year to $146 million. Continuous inventory de-stocking by customers serving the personal-care end markets more than offset disciplined pricing across end markets. The figure missed our estimate of $173.5 million.
Specialty Additives: Sales in the segment fell 22% year over year to $152 million, hurt by the inventory de-stocking that more than offset sustained inflation recovery. The figure missed our estimate of $163.9 million.
Intermediates: Sales in the segment went down 41% year over year to $43 million, affected by lower pricing and volumes of captive butanediol and merchant-derivatives sales. The figure missed our estimate of $56.4 million.
Financials
Operating activities generated $137 million in cash flows in the reported quarter against usage of $17 million in the same period last year. Ongoing free cash flow was $97 million, up from $13 million.
Outlook
Ashland expects continued customer de-stocking and external uncertainties for the remainder of fiscal 2023. The company expects adjusted EBITDA for the fiscal year to be roughly $500 million. It estimates sales for fiscal 2023 to be around $2.2 billion.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -24.02% due to these changes.
VGM Scores
Currently, Ashland has a poor Growth Score of F, however its Momentum Score is doing a lot better with a C. Following the exact same course, 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 Ashland has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.