Ashland Global Holdings Inc. ( ASH Quick Quote ASH - Free Report) announced an update for the preliminary first-quarter fiscal 2022 financial results and reaffirmed its outlook for the fiscal year 2022 results.
The company’s fiscal first-quarter results reflect continued strong end-market demand, sustained supply-chain and labor-availability challenges affecting shipments and on-time order delivery as well as lag impact on cost-inflation recovery from pricing actions.
Sales for the quarter were around $512 million, up 9% year over year. However, persistent supply-chain and labor-shortage challenges impacted the company’s ability to meet overall customer demand. This resulted in a delay of roughly $20 million of confirmed orders in late December with the majority being shipped in early January. Ashland continues to carry a large backlog of unconfirmed orders that it cannot commit to supply at this time.
Ashland projects income from continuing operations for the fiscal first quarter of roughly $32 million, or 55 cents per share. Adjusted earnings from continuing operations excluding intangibles amortization are anticipated to be roughly $51 million or 88 cents per share. Net income, including discontinued operations, is forecast to be around $48 million.
The company’s adjusted EBITDA is expected to be roughly $106 million, calling for an increase of 5% from the prior year’s levels driven by higher sales, but partly offset by the delay in price versus cost-inflation recovery and the temporary government-imposed shutdown of the plant in Nanjing, China.
For the full-year guidance, the company is focused on the visibility it has and the things it can control. It expects the current pandemic impact to subside, facilitating continued end-market demand recovery. Ashland continues to undertake pricing actions which are expected to result in margin normalization. The logistics and transportation outlook remains realistic, with only modest improvement expected during the fiscal year. The cost-inflation projection and the need for future pricing actions remain uncertain, the company noted.
Based on the current inflation and pricing expectations, the company projects fiscal 2022 sales in the range of $2.25-$2.35 billion. The guidance for adjusted EBITDA in the range of $550-$570 million remains unchanged.
Shares of Ashland have gained 17% in the past year against a 1.6% fall of the
industry. Image Source: Zacks Investment Research Zacks Rank & Key Picks
Ashland currently carries a Zacks Rank #5 (Strong Sell).
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