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Trinseo's (TSE) Earnings Top Estimates in Q2, Sales Up Y/Y
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Trinseo S.A. (TSE - Free Report) recorded a profit (from continuing operations) of $133 million or $3.35 per share in second-quarter 2021, up from a profit of $25.8 million or 67 cents a year ago.
Barring one-time items, earnings were $3.70 a share, up from 96 cents per share a year ago. The figure topped the Zacks Consensus Estimate of $2.84.
Revenues climbed around 138% year over year to $1,273.7 million in the quarter. The top line was driven by higher prices as well as increased sales volume, especially in the Base Plastics unit. The addition of the Arkema PMMA business also contributed to the top line growth.
Revenues at the Latex Binders segment shot up 89% year over year to $311 million in the reported quarter due to the pass through of higher raw material costs and increased sales volumes.
Revenues at the Engineered Materials segment surged 383% year over year to $181 million, aided by higher volumes. The company witnessed healthy demand for its applications including building & construction, consumer electronics, automotive and footwear.
Revenues at the Base Plastics unit went up 162% year over year to $397 million on higher volume in applications such as construction, appliances and automotive, as well as higher pricing.
Sales at the Polystyrene segment climbed 101% year over year to $313 million, due to the pass through of higher styrene costs.
Feedstocks segment sales surged 190% year over year to $71 million resulting from the pass through of higher styrene costs.
The Americas Styrenics unit logged adjusted EBITDA of $30 million for the quarter, up around 109% year over year, driven by higher polystyrene volume and increased styrene margin in North America.
Financials
Trinseo ended the quarter with cash and cash equivalents of $367 million, down around 37% year over year. Long-term debt was $2,310 million, up around 83% year over year.
Cash used in operating activities was $21 million for the reported quarter.
Outlook
For 2021, Trinseo sees net income from continuing operations in the range of $344-$380 million. Adjusted EBITDA is forecast in the band of $750-$800 million.
The company also expects cash from operations of $425-$475 million and free cash flow of $275-$325 million for full-year 2021.
Trinseo envisions strong earnings performance from continued commercial excellence actions and high demand for most of its products in the second half of the year. However, it expects earnings to decline from the first half of 2021 mainly due to no expected contribution from the Feedstocks segment.
Price Performance
Trinseo’s shares have surged 99.7% over a year, outperforming the industry's rise of 34.5%.
Image: Bigstock
Trinseo's (TSE) Earnings Top Estimates in Q2, Sales Up Y/Y
Trinseo S.A. (TSE - Free Report) recorded a profit (from continuing operations) of $133 million or $3.35 per share in second-quarter 2021, up from a profit of $25.8 million or 67 cents a year ago.
Barring one-time items, earnings were $3.70 a share, up from 96 cents per share a year ago. The figure topped the Zacks Consensus Estimate of $2.84.
Revenues climbed around 138% year over year to $1,273.7 million in the quarter. The top line was driven by higher prices as well as increased sales volume, especially in the Base Plastics unit. The addition of the Arkema PMMA business also contributed to the top line growth.
Trinseo S.A. Price, Consensus and EPS Surprise
Trinseo S.A. price-consensus-eps-surprise-chart | Trinseo S.A. Quote
Segment Highlights
Revenues at the Latex Binders segment shot up 89% year over year to $311 million in the reported quarter due to the pass through of higher raw material costs and increased sales volumes.
Revenues at the Engineered Materials segment surged 383% year over year to $181 million, aided by higher volumes. The company witnessed healthy demand for its applications including building & construction, consumer electronics, automotive and footwear.
Revenues at the Base Plastics unit went up 162% year over year to $397 million on higher volume in applications such as construction, appliances and automotive, as well as higher pricing.
Sales at the Polystyrene segment climbed 101% year over year to $313 million, due to the pass through of higher styrene costs.
Feedstocks segment sales surged 190% year over year to $71 million resulting from the pass through of higher styrene costs.
The Americas Styrenics unit logged adjusted EBITDA of $30 million for the quarter, up around 109% year over year, driven by higher polystyrene volume and increased styrene margin in North America.
Financials
Trinseo ended the quarter with cash and cash equivalents of $367 million, down around 37% year over year. Long-term debt was $2,310 million, up around 83% year over year.
Cash used in operating activities was $21 million for the reported quarter.
Outlook
For 2021, Trinseo sees net income from continuing operations in the range of $344-$380 million. Adjusted EBITDA is forecast in the band of $750-$800 million.
The company also expects cash from operations of $425-$475 million and free cash flow of $275-$325 million for full-year 2021.
Trinseo envisions strong earnings performance from continued commercial excellence actions and high demand for most of its products in the second half of the year. However, it expects earnings to decline from the first half of 2021 mainly due to no expected contribution from the Feedstocks segment.
Price Performance
Trinseo’s shares have surged 99.7% over a year, outperforming the industry's rise of 34.5%.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
Trinseo currently carries a Zacks Rank #2 (Buy).
Other top-ranked stocks worth considering in the basic materials space include Nucor Corporation (NUE - Free Report) , ArcelorMittal (MT - Free Report) and Olin Corporation (OLN - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Nucor has a projected earnings growth rate of 455.7% for the current year. The company’s shares have surged around 141% in a year.
ArcelorMittal has an expected earnings growth rate of 1,731.2% for the current year. The company’s shares have shot up around 186% in the past year.
Olin has an expected earnings growth rate of around 590.4% for the current year. The company’s shares have rallied roughly 312% in the past year.