Versum Materials, Inc. recorded profit of $50.4 million or 46 cents per share in second-quarter fiscal 2019 (ended Mar 31, 2019), down 18% from $61.6 million or 56 cents a year ago. The bottom line in the reported quarter was hurt by transaction- related expenses, higher taxes and lower revenues.
Barring one-time items, adjusted earnings came in at 57 cents per share, which matched the Zacks Consensus Estimate.
Sales fell around 4% year over year to $326.2 million for the quarter, affected by lower sales in both Materials and Delivery Systems & Services (DS&S) segments. The figure, trailed the Zacks Consensus Estimate of $337.5 million.
Segment Highlights
Revenues at the Materials segment edged down 1% year over year to $216.5 million in the reported quarter as volume growth was masked by unfavorable price/mix and currency impacts. Performance was impacted by weaker demand in foundry.
Sales at the DS&S unit dropped 10% year over year to $109.1 million in the quarter, affected by weaker demand and project timing.
Financials
Versum Materials ended the quarter with cash and cash equivalents of $390.8 million, up around 54% year over year. Long-term debt was $972.2 million, down 0.4% year over year.
Cash from operations was $73.3 million for six months ended Mar 31, up from $56.5 million a year-ago.
Outlook
Versum Materials, in April 2019, entered into a definitive merger deal with Merck KGaA. The merger is expected to create a leading electronic materials player focused on the semiconductor and display industries. The companies are working towards closing the transaction in second-half 2019.
Versum Materials sees sales in the range of $1.38-$1.43 billion for fiscal 2019 (up 1-4% year over year). Adjusted EBITDA has been forecast between $465 million and $485 million (up 4-9% year over year).
Price Performance
Shares of Versum Materials have gained 31.9% over a year compared with the industry’s 0.9% rise.
Zacks Rank and Stocks to Consider
Versum Materials currently carries a Zacks Rank #4 (Sell).
Better-ranked stocks in the basic materials space include AngloGold Ashanti Limited (AU - Free Report) , Flexible Solutions International Inc. (FSI - Free Report) and Air Products and Chemicals, Inc. (APD - Free Report) .
AngloGold has an expected earnings growth rate of 86.8% for the current year and carries a Zacks Rank #1 (Strong Buy). The company’s shares have shot up around 38% over the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
Flexible Solutions has an expected earnings growth rate of 171.4% for the current year and carries a Zacks Rank #2 (Buy). Its shares have rallied roughly 88% in the past year.
Air Products has an expected earnings growth rate of 10.3% for the current fiscal year and carries a Zacks Rank #2. Its shares have gained around 24% in the past year.
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Versum Materials, Inc. recorded profit of $50.4 million or 46 cents per share in second-quarter fiscal 2019 (ended Mar 31, 2019), down 18% from $61.6 million or 56 cents a year ago. The bottom line in the reported quarter was hurt by transaction- related expenses, higher taxes and lower revenues.
Barring one-time items, adjusted earnings came in at 57 cents per share, which matched the Zacks Consensus Estimate.
Sales fell around 4% year over year to $326.2 million for the quarter, affected by lower sales in both Materials and Delivery Systems & Services (DS&S) segments. The figure, trailed the Zacks Consensus Estimate of $337.5 million.
Segment Highlights
Revenues at the Materials segment edged down 1% year over year to $216.5 million in the reported quarter as volume growth was masked by unfavorable price/mix and currency impacts. Performance was impacted by weaker demand in foundry.
Sales at the DS&S unit dropped 10% year over year to $109.1 million in the quarter, affected by weaker demand and project timing.
Financials
Versum Materials ended the quarter with cash and cash equivalents of $390.8 million, up around 54% year over year. Long-term debt was $972.2 million, down 0.4% year over year.
Cash from operations was $73.3 million for six months ended Mar 31, up from $56.5 million a year-ago.
Outlook
Versum Materials, in April 2019, entered into a definitive merger deal with Merck KGaA. The merger is expected to create a leading electronic materials player focused on the semiconductor and display industries. The companies are working towards closing the transaction in second-half 2019.
Versum Materials sees sales in the range of $1.38-$1.43 billion for fiscal 2019 (up 1-4% year over year). Adjusted EBITDA has been forecast between $465 million and $485 million (up 4-9% year over year).
Price Performance
Shares of Versum Materials have gained 31.9% over a year compared with the industry’s 0.9% rise.
Zacks Rank and Stocks to Consider
Versum Materials currently carries a Zacks Rank #4 (Sell).
Better-ranked stocks in the basic materials space include AngloGold Ashanti Limited (AU - Free Report) , Flexible Solutions International Inc. (FSI - Free Report) and Air Products and Chemicals, Inc. (APD - Free Report) .
AngloGold has an expected earnings growth rate of 86.8% for the current year and carries a Zacks Rank #1 (Strong Buy). The company’s shares have shot up around 38% over the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
Flexible Solutions has an expected earnings growth rate of 171.4% for the current year and carries a Zacks Rank #2 (Buy). Its shares have rallied roughly 88% in the past year.
Air Products has an expected earnings growth rate of 10.3% for the current fiscal year and carries a Zacks Rank #2. Its shares have gained around 24% in the past year.
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One out of every six people retires a multimillionaire. Get smart tips you can do today to become one of them in a new Special Report, “7 Things You Can Do Now to Retire a Multimillionaire.”
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Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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