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Will Univar (UNVR) Spring a Surprise this Earnings Season?
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Univar Inc. is slated to release first-quarter 2017 results ahead of the bell on May 5.
The chemical company logged adjusted earnings of 27 cents per share in fourth-quarter 2016, against a loss of 2 cents per share in the prior-year quarter. Earnings beat the Zacks Consensus Estimate of 21 cents.
Univar recorded net sales of $1,813 million for the fourth quarter, down 7.8% year over year. It missed the Zacks Consensus Estimate of $1,847 million.
The company’s earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, missed once and came in line in another occasion, with an average positive surprise of 18.67%.
Can the company surprise investors again or is it heading for a possible pullback? Let’s see how things are shaping up for this announcement.
Univar, in the previous earnings call, said that the company’s operational plan for 2017 includes executing Operational Excellence and Commercial Greatness initiatives. The company expects headwinds from foreign exchange translations as well as selective commercial and technological investments to impact expected gains, resulting in low single digit growth in adjusted EBITDA (earnings before interest, tax, depreciation and amortization) in the first half of 2017.
The growth in EBITDA is expected to gather momentum by the end of the year as the company’s initiatives take hold. Overall, the company anticipates to deliver mid-single digit growth in adjusted EBITDA in 2017. Univar expects adjusted EBITDA for the first quarter to be slightly above that of year-ago quarter figure of $134.1 million.
Sluggish industrial demand and foreign currency translations in the upstream oil and gas markets plagued Univar in the preceding quarter. However, despite these challenges the company was able to expand adjusted EBITDA by 10.8% in the Canada, EMEA and Rest of World segments. Moreover, the gross margins increased to 21.4% or 140 basis points, while overall adjusted EBITDA increased to 7% or 30 basis points.
Univar is executing several actions to drive productivity including operating expense reductions, mix enrichments and margin expansion. The company also expects its asset-light business model, which provides stability, to sustain in the current uncertain macroeconomic environment.
While industrial demand is expected to remain sluggish and volatility from oil and gas are likely to persist, the company’s productivity actions and organic growth initiatives are expected to offset some of the negative impacts in the to-be-reported quarter.
Univar’s shares rallied around 4.8% over the past three months, outperforming the Zacks categorized Chemicals-Diversified industry’s 3.1% gain.
Earnings Whispers
Our proven model does not conclusively show that Univar will beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here as you will see below:
Zacks ESP: Earnings ESP for Univar is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 22 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Note that we caution against Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks That Warrant a Look
Here are some companies in the basic materials space you may want to consider as our model shows these have the right combination of elements to post an earnings beat this quarter:
Albemarle Corporation (ALB - Free Report) has an Earnings ESP of +1.05% and carries a Zacks Rank #3.
CF Industries Holdings, Inc. (CF - Free Report) has an Earnings ESP of +55.56% and carries a Zacks Rank #3.
Franco-Nevada Corporation (FNV - Free Report) has an Earnings ESP of +10.00% and carries a Zacks Rank #3.
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With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
Image: Bigstock
Will Univar (UNVR) Spring a Surprise this Earnings Season?
Univar Inc. is slated to release first-quarter 2017 results ahead of the bell on May 5.
The chemical company logged adjusted earnings of 27 cents per share in fourth-quarter 2016, against a loss of 2 cents per share in the prior-year quarter. Earnings beat the Zacks Consensus Estimate of 21 cents.
Univar recorded net sales of $1,813 million for the fourth quarter, down 7.8% year over year. It missed the Zacks Consensus Estimate of $1,847 million.
The company’s earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, missed once and came in line in another occasion, with an average positive surprise of 18.67%.
Can the company surprise investors again or is it heading for a possible pullback? Let’s see how things are shaping up for this announcement.
Univar Inc. Price and EPS Surprise
Univar Inc. Price and EPS Surprise | Univar Inc. Quote
Factors to Consider
Univar, in the previous earnings call, said that the company’s operational plan for 2017 includes executing Operational Excellence and Commercial Greatness initiatives. The company expects headwinds from foreign exchange translations as well as selective commercial and technological investments to impact expected gains, resulting in low single digit growth in adjusted EBITDA (earnings before interest, tax, depreciation and amortization) in the first half of 2017.
The growth in EBITDA is expected to gather momentum by the end of the year as the company’s initiatives take hold. Overall, the company anticipates to deliver mid-single digit growth in adjusted EBITDA in 2017. Univar expects adjusted EBITDA for the first quarter to be slightly above that of year-ago quarter figure of $134.1 million.
Sluggish industrial demand and foreign currency translations in the upstream oil and gas markets plagued Univar in the preceding quarter. However, despite these challenges the company was able to expand adjusted EBITDA by 10.8% in the Canada, EMEA and Rest of World segments. Moreover, the gross margins increased to 21.4% or 140 basis points, while overall adjusted EBITDA increased to 7% or 30 basis points.
Univar is executing several actions to drive productivity including operating expense reductions, mix enrichments and margin expansion. The company also expects its asset-light business model, which provides stability, to sustain in the current uncertain macroeconomic environment.
While industrial demand is expected to remain sluggish and volatility from oil and gas are likely to persist, the company’s productivity actions and organic growth initiatives are expected to offset some of the negative impacts in the to-be-reported quarter.
Univar’s shares rallied around 4.8% over the past three months, outperforming the Zacks categorized Chemicals-Diversified industry’s 3.1% gain.
Earnings Whispers
Our proven model does not conclusively show that Univar will beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here as you will see below:
Zacks ESP: Earnings ESP for Univar is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 22 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Univar currently sports a Zacks Rank #1, which when combined with a 0.00% ESP, makes surprise prediction difficult. You can see the complete list of today’s Zacks Rank #1 stocks here.
Note that we caution against Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks That Warrant a Look
Here are some companies in the basic materials space you may want to consider as our model shows these have the right combination of elements to post an earnings beat this quarter:
Albemarle Corporation (ALB - Free Report) has an Earnings ESP of +1.05% and carries a Zacks Rank #3.
CF Industries Holdings, Inc. (CF - Free Report) has an Earnings ESP of +55.56% and carries a Zacks Rank #3.
Franco-Nevada Corporation (FNV - Free Report) has an Earnings ESP of +10.00% and carries a Zacks Rank #3.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
See This Ticker Free >>