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.
Univar's (UNVR) Q4 Earnings Beat Estimates, Revenues Lag
Read MoreHide Full Article
Univar Inc. recorded profits (on a reported basis) of $1.2 million or a penny per share in fourth-quarter 2018, down roughly 96% from a profit of $27 million or 19 cents a year ago. The bottom line in the reported quarter includes a pension mark-to-market loss of $34.2 million and acquisition and integration related expenses of $15.1 million.
Barring one-time items, earnings came in at 33 cents a share in the quarter, beating the Zacks Consensus Estimate of 32 cents.
The chemical maker’s revenues edged up 0.6% year over year to $1,971.2 million in the quarter, falling shy of the Zacks Consensus Estimate of $2,022.1 million.
The company faced challenges in Canada and weaker-than-expected demand from most industrial end markets in the reported quarter. However, it gained from improved operational execution.
For 2018, profit was $172.3 million or $1.21 per share, up around 44% from $119.8 million or 85 cents per share recorded in 2017. Adjusted earnings per share were $1.62 per share, up from $1.39 per share a year ago.
Revenues for the year went up around 5% year over year to $8,632.5 million.
Segment Review
Revenues at the USA division increased 2.8% year over year to $1,161.5 million in the reported quarter. Gross profit rose 3.1% year over year to $268.2 million, helped by improved execution.
Revenues at the Canada segment declined 2.7% year over year to $264.5 million. Gross profit fell 11.4% year over year to $51.5 million in the quarter. The segment faced headwinds from weak demand in energy markets in Western Canada and continued challenges in the weather-impacted agriculture business.
The EMEA segment raked in sales of $452.8 million, down 1.8% year over year. Gross profit edged down 0.6% year over year to $104 million.
Sales from the Rest of World unit declined 4% to $92.4 million. Gross profit declined 6.4% year over year to $20.6 million. Strong performance in Mexico was offset by weakness in Brazil.
Balance Sheet
Univar ended 2018 with cash and cash equivalents of $121.6 million, down around 74% year over year. Long-term debt was $2,350.4 million, down around 17% year over year.
Outlook
Univar, in September 2018, agreed to buy global chemicals and plastics distributor, Nexeo Solutions, Inc. in a cash and stock deal valued at roughly $2 billion. The deal, which has secured regulatory approvals from the United States, the European Union and Canada, is expected to close in first-quarter 2019. Following the completion of the acquisition, Univar plans to issue pro-forma guidance for the combined company for 2019.
On a stand-alone basis, Univar expects adjusted EBITDA for 2019 to be roughly equal to its 2018 results of $640.4 million. Foreign currency translation is forecast to lower adjusted EBITDA by roughly $13 million in 2019. While the company expects to face headwind from an uncertain demand environment, it expects to gain from improvement in sales force efficiency and productivity gains.
The company also expects free cash flow of $250-$300 million for 2019, representing an increase from $195.3 million in 2018.
For first-quarter 2019, Univar expects to generate adjusted EBITDA of $140-$145 million and adjusted earnings per share of 27-29 cents.
The company expects sustained weakness in global industrial markets. Foreign currency translation is also forecast to lower adjusted EBITDA by roughly $6 million in the first quarter. Factoring in these challenges, Univar expects the first quarter to be the weakest quarter of 2019.
Price Performance
Univar's shares have lost 18.8% over a year, outperforming the industry’s fall of 21.5%.
Zacks Rank & Stocks to Consider
Univar carries a Zacks Rank #3 (Hold).
A few better-ranked stocks worth considering in the basic materials space include The Mosaic Company (MOS - Free Report) and Israel Chemicals Ltd. (ICL - Free Report) .
Mosaic has an expected earnings growth rate of 24% for the current year and carries a Zacks Rank #1 (Strong Buy). Its shares have gained 23% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
Israel Chemicals has an expected earnings growth rate of 10.8% for the current year and carries a Zacks Rank #2 (Buy). The company’s shares have rallied 38% over the past year.
Zacks' Best Stock-Picking Strategy
It's hard to believe, even for us at Zacks. But from 2000-2018, while the market gained +4.8% per year, our top stock-picking strategy averaged +54.3% per year.
How has that screen done lately? From 2017-2018, it sextupled the market's +15.8% gain with a soaring +98.3% return.
Image: Bigstock
Univar's (UNVR) Q4 Earnings Beat Estimates, Revenues Lag
Univar Inc. recorded profits (on a reported basis) of $1.2 million or a penny per share in fourth-quarter 2018, down roughly 96% from a profit of $27 million or 19 cents a year ago. The bottom line in the reported quarter includes a pension mark-to-market loss of $34.2 million and acquisition and integration related expenses of $15.1 million.
Barring one-time items, earnings came in at 33 cents a share in the quarter, beating the Zacks Consensus Estimate of 32 cents.
The chemical maker’s revenues edged up 0.6% year over year to $1,971.2 million in the quarter, falling shy of the Zacks Consensus Estimate of $2,022.1 million.
The company faced challenges in Canada and weaker-than-expected demand from most industrial end markets in the reported quarter. However, it gained from improved operational execution.
Univar Inc. Price, Consensus and EPS Surprise
Univar Inc. Price, Consensus and EPS Surprise | Univar Inc. Quote
FY18 Results
For 2018, profit was $172.3 million or $1.21 per share, up around 44% from $119.8 million or 85 cents per share recorded in 2017. Adjusted earnings per share were $1.62 per share, up from $1.39 per share a year ago.
Revenues for the year went up around 5% year over year to $8,632.5 million.
Segment Review
Revenues at the USA division increased 2.8% year over year to $1,161.5 million in the reported quarter. Gross profit rose 3.1% year over year to $268.2 million, helped by improved execution.
Revenues at the Canada segment declined 2.7% year over year to $264.5
million. Gross profit fell 11.4% year over year to $51.5 million in the quarter. The segment faced headwinds from weak demand in energy markets in Western Canada and continued challenges in the weather-impacted agriculture business.
The EMEA segment raked in sales of $452.8 million, down 1.8% year over year. Gross profit edged down 0.6% year over year to $104 million.
Sales from the Rest of World unit declined 4% to $92.4 million. Gross profit declined 6.4% year over year to $20.6 million. Strong performance in Mexico was offset by weakness in Brazil.
Balance Sheet
Univar ended 2018 with cash and cash equivalents of $121.6 million, down around 74% year over year. Long-term debt was $2,350.4 million, down around 17% year over year.
Outlook
Univar, in September 2018, agreed to buy global chemicals and plastics distributor, Nexeo Solutions, Inc. in a cash and stock deal valued at roughly $2 billion. The deal, which has secured regulatory approvals from the United States, the European Union and Canada, is expected to close in first-quarter 2019. Following the completion of the acquisition, Univar plans to issue pro-forma guidance for the combined company for 2019.
On a stand-alone basis, Univar expects adjusted EBITDA for 2019 to be roughly equal to its 2018 results of $640.4 million. Foreign currency translation is forecast to lower adjusted EBITDA by roughly $13 million in 2019. While the company expects to face headwind from an uncertain demand environment, it expects to gain from improvement in sales force efficiency and productivity gains.
The company also expects free cash flow of $250-$300 million for 2019, representing an increase from $195.3 million in 2018.
For first-quarter 2019, Univar expects to generate adjusted EBITDA of $140-$145 million and adjusted earnings per share of 27-29 cents.
The company expects sustained weakness in global industrial markets. Foreign currency translation is also forecast to lower adjusted EBITDA by roughly $6 million in the first quarter. Factoring in these challenges, Univar expects the first quarter to be the weakest quarter of 2019.
Price Performance
Univar's shares have lost 18.8% over a year, outperforming the industry’s fall of 21.5%.
Zacks Rank & Stocks to Consider
Univar carries a Zacks Rank #3 (Hold).
A few better-ranked stocks worth considering in the basic materials space include The Mosaic Company (MOS - Free Report) and Israel Chemicals Ltd. (ICL - Free Report) .
Mosaic has an expected earnings growth rate of 24% for the current year and carries a Zacks Rank #1 (Strong Buy). Its shares have gained 23% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
Israel Chemicals has an expected earnings growth rate of 10.8% for the current year and carries a Zacks Rank #2 (Buy). The company’s shares have rallied 38% over the past year.
Zacks' Best Stock-Picking Strategy
It's hard to believe, even for us at Zacks. But from 2000-2018, while the market gained +4.8% per year, our top stock-picking strategy averaged +54.3% per year.
How has that screen done lately? From 2017-2018, it sextupled the market's +15.8% gain with a soaring +98.3% return.
Free – See the Stocks It Turned Up for Today >>