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Element Solutions (ESI) Q1 Earnings Top Estimate, Sales Up Y/Y

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Element Solutions Inc. (ESI - Free Report) recorded earnings (as reported) from continuing operations of 33 cents per share in first-quarter 2021, up from 3 cents in the year-ago quarter.

Adjusted earnings per share (EPS) of 37 cents for the quarter topped the Zacks Consensus Estimate of 32 cents.

The company generated net sales of $550.1 million, up around 22% year over year. Organic net sales, barring the impact of currency changes, specific pass-through metal prices and acquisitions, rose 11% year over year. The company benefited from strong demand in the broader electronics supply chain and accelerated demand across the industrial economy.

 

Element Solutions Inc. Price, Consensus and EPS Surprise

 

Element Solutions Inc. Price, Consensus and EPS Surprise

Element Solutions Inc. price-consensus-eps-surprise-chart | Element Solutions Inc. Quote

 

Segment Highlights

Net sales in the Electronics segment rose 31% year over year to $354 million in the reported quarter. Organic net sales increased 18% from the year-ago quarter’s reported figure. Adjusted EBITDA was $93 million, up 39% year over year.

Net sales in the Industrial & Specialty unit went up 7% year over year to $197 million. Organic net sales moved up 1% year over year. Adjusted EBITDA in the segment was $45 million, up 4% year over year.

Financial Position

Element Solutions ended the quarter with cash and cash equivalents of $317.5 million, down around 36% year over year. Long-term debt was $1,507 million at the end of the quarter, down 0.3% year over year.

The company generated cash flows from operating activities of $33 million in the reported quarter. Free cash flows for the quarter were $24 million.

Outlook

The company increased in adjusted EPS guidance to at least $1.30, up from the prior view of $1.10-1.15. It also now expects adjusted EBITDA in the band of $500-$510 million. Moreover, it anticipates generating free cash flow of $285 million for 2021, up from $275 million expected earlier.

For the second quarter, the company sees adjusted EBITDA to be in the range of $125-$130 million. It expects higher raw material prices and other cost inflation to slightly impact profitability.

Price Performance

Shares of Element Solutions have surged 109% in a year compared with 32.4% rise of the industry.

 

 

Zacks Rank & Key Picks

Element Solutions currently carries a Zacks Rank #2 (Buy).

Other top-ranked stocks worth considering in the basic materials space include Nucor Corporation (NUE - Free Report) , Dow Inc. (DOW - Free Report) ) and Impala Platinum Holdings Limited (IMPUY - Free Report) .

Nucor has a projected earnings growth rate of 228.4% for the current year. The company’s shares have rallied around 92% in a year. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Dow has a projected earnings growth rate of 261.5% for the current year. The company’s shares have shot up around 69% in a year. It currently sports a Zacks Rank #1.

Impala Platinum has an expected earnings growth rate of 197.6% for the current fiscal. The company’s shares have surged around 225% in the past year. It currently carries a Zacks Rank #1.

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