Element Solutions Inc. (ESI - Free Report) recorded a loss of 13 cents per share in third-quarter 2023 compared with earnings of 22 cents in the year-ago quarter.
Adjusted earnings per share came in at 36 cents in the quarter, beating the Zacks Consensus Estimate of 34 cents.
The company generated net sales of $599.3 million, down 3% year over year. The figure missed the Zacks Consensus Estimate of $624.5 million. In the reported quarter, the company achieved robust sequential growth in adjusted EBITDA, primarily driven by a recovery in the electronics segment and expanding profit margins.
Segment Highlights
Net sales in the Electronics segment fell 6% year over year to $367 million in the reported quarter, with organic net sales down 5% from the previous year's reported figure. The figure fell short of our estimate of $388.8 million.
In the Industrial & Specialty segment, net sales declined 1% year over year to $232 million, with organic net sales dropping 1%. The figure was below our estimate of $245.2 million.
Financial Position
Element Solutions ended the quarter with cash and cash equivalents of $329.6 million, up 40.9% year over year. Long-term debt was $2,027.8 million at the end of the quarter, up 7.4% year over year.
Cash from operating activities was $87 million in the quarter. Free cash flow was $75 million.
Outlook
ESI revised its adjusted EBITDA guidance to nearly $485 million for 2023.
It estimates full-year 2023 adjusted earnings per share of around $1.30. ESI anticipates generating a free cash flow of about $265 million for 2023.
Price Performance
Shares of Element Solutions have gained 4.8% in a year compared with a 6.1% rise of the industry.
Zacks Rank & Key Picks
Element Solutions currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Basic Materials space are The Andersons Inc. (ANDE - Free Report) , sporting a Zacks Rank #1 (Strong Buy) and WestRock Company (WRK - Free Report) and Koppers Holdings Inc. (KOP - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for ANDE's current-year earnings has been revised 3.3% upward in the past 90 days. Andersons beat the Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 64.4% on average. ANDE shares have rallied around 43.4% in a year.
In the past 60 days, the Zacks Consensus Estimate for WestRock’s current fiscal year has been revised upward by 5.2%. WRK beat the Zacks Consensus Estimate in three of the last four quarters while missing in one quarter, with the average earnings surprise being 30.7%. The company’s shares have rallied 4.6% in the past year.
The consensus estimate for Koppers’ current fiscal year earnings is pegged at $4.45, indicating year-over-year growth of 7.5%. KOP beat the Zacks Consensus Estimate in all of the last four quarters, with the average earnings surprise being 21.7%. The company’s shares have surged 46% in the past year.
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Element Solutions Inc. (ESI - Free Report) recorded a loss of 13 cents per share in third-quarter 2023 compared with earnings of 22 cents in the year-ago quarter.
Adjusted earnings per share came in at 36 cents in the quarter, beating the Zacks Consensus Estimate of 34 cents.
The company generated net sales of $599.3 million, down 3% year over year. The figure missed the Zacks Consensus Estimate of $624.5 million. In the reported quarter, the company achieved robust sequential growth in adjusted EBITDA, primarily driven by a recovery in the electronics segment and expanding profit margins.
Segment Highlights
Net sales in the Electronics segment fell 6% year over year to $367 million in the reported quarter, with organic net sales down 5% from the previous year's reported figure. The figure fell short of our estimate of $388.8 million.
In the Industrial & Specialty segment, net sales declined 1% year over year to $232 million, with organic net sales dropping 1%. The figure was below our estimate of $245.2 million.
Financial Position
Element Solutions ended the quarter with cash and cash equivalents of $329.6 million, up 40.9% year over year. Long-term debt was $2,027.8 million at the end of the quarter, up 7.4% year over year.
Cash from operating activities was $87 million in the quarter. Free cash flow was $75 million.
Outlook
ESI revised its adjusted EBITDA guidance to nearly $485 million for 2023.
It estimates full-year 2023 adjusted earnings per share of around $1.30. ESI anticipates generating a free cash flow of about $265 million for 2023.
Price Performance
Shares of Element Solutions have gained 4.8% in a year compared with a 6.1% rise of the industry.
Zacks Rank & Key Picks
Element Solutions currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Basic Materials space are The Andersons Inc. (ANDE - Free Report) , sporting a Zacks Rank #1 (Strong Buy) and WestRock Company (WRK - Free Report) and Koppers Holdings Inc. (KOP - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for ANDE's current-year earnings has been revised 3.3% upward in the past 90 days. Andersons beat the Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 64.4% on average. ANDE shares have rallied around 43.4% in a year.
In the past 60 days, the Zacks Consensus Estimate for WestRock’s current fiscal year has been revised upward by 5.2%. WRK beat the Zacks Consensus Estimate in three of the last four quarters while missing in one quarter, with the average earnings surprise being 30.7%. The company’s shares have rallied 4.6% in the past year.
The consensus estimate for Koppers’ current fiscal year earnings is pegged at $4.45, indicating year-over-year growth of 7.5%. KOP beat the Zacks Consensus Estimate in all of the last four quarters, with the average earnings surprise being 21.7%. The company’s shares have surged 46% in the past year.
4 Oil Stocks with Massive Upsides
Global demand for oil is through the roof... and oil producers are struggling to keep up. So even though oil prices are well off their recent highs, you can expect big profits from the companies that supply the world with "black gold."
Zacks Investment Research has just released an urgent special report to help you bank on this trend.
In Oil Market on Fire, you'll discover 4 unexpected oil and gas stocks positioned for big gains in the coming weeks and months. You don't want to miss these recommendations.
Download your free report now to see them.
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