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Why Is Olin (OLN) Up 2.2% Since Last Earnings Report?

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It has been about a month since the last earnings report for Olin (OLN - Free Report) . Shares have added about 2.2% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Olin due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Olin's Earnings and Revenue Surpass Estimates in Q2

Olin posted a profit of $355.8 million or $2.17 per share in second-quarter 2021 against a loss of $120.1 million or 76 cents in the year-ago quarter.

Excluding one-time items, adjusted earnings for the quarter were $1.73 per share that beat the Zacks Consensus Estimate of $1.45.

The chemical maker’s revenues surged roughly 79% year over year to $2,221.3 million in the quarter. It also surpassed the Zacks Consensus Estimate of $2,052.2 million. The company saw strong sales across all its segments in the second quarter. It benefited from higher pricing and volumes in the quarter.

Segment Review

Chlor Alkali Products and Vinyls: Revenues in the division rose 48.5% year over year to $967.3 million in the reported quarter due to higher pricing across all products and improved volumes.

Epoxy: Revenues in the division skyrocketed 113.9% year over year to $850 million on higher pricing and volumes.

Winchester: Revenues shot up 109.8% year over year to $404 million on increased commercial and military sales as well as higher commercial ammunition pricing.

Financials

Olin ended the second quarter with cash and cash equivalents of $272.8 million, up roughly 14.7% year over year. Long-term debt was $3,381.8 million at the end of the quarter, down around 17% year over year.

Outlook

Olin expects to deliver adjusted EBITDA of at least $2.1 billion for 2021.

The company anticipates Chlor Alkali Products and Vinyls, Epoxy, and Winchester segments’ third-quarter results to increase sequentially.
Moreover, it expects third-quarter 2021 adjusted EBITDA to improve sequentially from second-quarter 2021 levels.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended upward during the past month. The consensus estimate has shifted 23.25% due to these changes.

VGM Scores

At this time, Olin has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Olin has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.


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