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Olin's (OLN) Earnings Beat, Revenues Miss Estimates in Q3
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Olin Corporation (OLN - Free Report) posted a profit of $390.7 million or $2.38 per share in third-quarter 2021 against a loss of $736.8 million or $4.67 in the year-ago quarter. Earnings per share surpassed the Zacks Consensus Estimate of $2.08.
The chemical maker’s revenues surged 62.8% year over year to $2,340.1 million in the quarter. The top line missed the Zacks Consensus Estimate of $2,379.9 million. The company recorded strong sales across all its segments in the third quarter. It benefited from higher pricing in the quarter.
Segment Review
Chlor Alkali Products and Vinyls: Revenues in the division rose 40.7% year over year to $1,062.4 million in the reported quarter on the back of higher pricing, partly offset by lower volumes.
Epoxy: Revenues in the division appreciated 84.4% year over year to $877.7 million led by higher pricing.
Winchester: Revenues shot up around 94% year over year to $400 million on increased commercial and military sales, including ammunition produced at Lake City as well as higher commercial ammunition pricing.
Financials
Olin ended the third quarter with cash and cash equivalents of $306.1 million, up roughly 8.3% year over year. Long-term debt was $2,823.5 million at the end of the quarter, down around 28.7%.
In the reported quarter the company repurchased around 1.5 million shares of common stock for $68.3 million.
Outlook
Going forward, Olin expects a sequential increase in results in the Chlor Alkali Products and Vinyls segment but a seasonal decline in the Epoxy and Winchester segments in the fourth quarter. Overall, it expects fourth-quarter adjusted EBITDA to be comparable to or slightly lower than the third-quarter levels. Olin is also aiming for an improvement in its net debt to adjusted EBITDA ratio through a combination of improved adjusted EBITDA, disciplined capital spending, and debt reduction by end of 2021. For the full year, it is targeting debt reduction of roughly $1.1 billion by using the cash generated from operations.
Price Performance
Shares of Olin have catapulted 199.7% in a year, significantly outperforming the industry’s growth of 23.2%.
Image Source: Zacks Investment Research
Zacks Rank & Other Key Picks
Olin currently carries a Zacks Rank #1 (Strong Buy).
Image: Bigstock
Olin's (OLN) Earnings Beat, Revenues Miss Estimates in Q3
Olin Corporation (OLN - Free Report) posted a profit of $390.7 million or $2.38 per share in third-quarter 2021 against a loss of $736.8 million or $4.67 in the year-ago quarter. Earnings per share surpassed the Zacks Consensus Estimate of $2.08.
The chemical maker’s revenues surged 62.8% year over year to $2,340.1 million in the quarter. The top line missed the Zacks Consensus Estimate of $2,379.9 million. The company recorded strong sales across all its segments in the third quarter. It benefited from higher pricing in the quarter.
Segment Review
Chlor Alkali Products and Vinyls: Revenues in the division rose 40.7% year over year to $1,062.4 million in the reported quarter on the back of higher pricing, partly offset by lower volumes.
Epoxy: Revenues in the division appreciated 84.4% year over year to $877.7 million led by higher pricing.
Winchester: Revenues shot up around 94% year over year to $400 million on increased commercial and military sales, including ammunition produced at Lake City as well as higher commercial ammunition pricing.
Financials
Olin ended the third quarter with cash and cash equivalents of $306.1 million, up roughly 8.3% year over year. Long-term debt was $2,823.5 million at the end of the quarter, down around 28.7%.
In the reported quarter the company repurchased around 1.5 million shares of common stock for $68.3 million.
Outlook
Going forward, Olin expects a sequential increase in results in the Chlor Alkali Products and Vinyls segment but a seasonal decline in the Epoxy and Winchester segments in the fourth quarter. Overall, it expects fourth-quarter adjusted EBITDA to be comparable to or slightly lower than the third-quarter levels. Olin is also aiming for an improvement in its net debt to adjusted EBITDA ratio through a combination of improved adjusted EBITDA, disciplined capital spending, and debt reduction by end of 2021. For the full year, it is targeting debt reduction of roughly $1.1 billion by using the cash generated from operations.
Price Performance
Shares of Olin have catapulted 199.7% in a year, significantly outperforming the industry’s growth of 23.2%.
Zacks Rank & Other Key Picks
Olin currently carries a Zacks Rank #1 (Strong Buy).
Other top-ranked stocks in the basic materials space include AdvanSix Inc. (ASIX - Free Report) , DAQO New Energy Corp. (DQ - Free Report) , and Element Solutions Inc. (ESI - Free Report) , each flaunting a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
AdvanSix has a projected earnings growth rate of 178.1% for the current year. The company’s shares have shot up 195.9% over the past year.
DAQO has a projected earnings growth rate of 566.9% for the current year. The company’s shares have grown 51.5% over the past year.
Element has a projected earnings growth rate of 44.8% for the current year. The company’s shares have climbed 86% over the past year.