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Ashland's (ASH) Earnings and Revenues Surpass Estimates in Q2

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Ashland Global Holdings Inc. (ASH - Free Report) recorded profits from continuing operations of $38 million or 66 cents per share in the second quarter of fiscal 2022 (ending Mar 31, 2022), up from $25 million or 40 cents in the prior-year quarter.

Barring one-time items, adjusted earnings came in at $1.50 per share, up from the year-ago quarter’s figure of 84 cents. It topped the Zacks Consensus Estimate of $1.36.

Sales rose around 19% year over year to $604 million, and beat the Zacks Consensus Estimate of $603.9 million. The top line was driven mainly by disciplined pricing actions leading to a recovery in costs in a high-inflation environment as well as better product mix. The company witnessed a double-digit year over year sales growth across its segments in the quarter. It benefited from strong demand across its end markets.

 

Ashland Global Holdings Inc. Price, Consensus and EPS Surprise

 

Ashland Global Holdings Inc. Price, Consensus and EPS Surprise

Ashland Global Holdings Inc. price-consensus-eps-surprise-chart | Ashland Global Holdings Inc. Quote

 

Segment Highlights

Life Sciences: Sales in the segment were up 10% year over year to $204 million in the reported quarter, aided by double-digit growth to pharmaceutical customers reflecting better product mix and cost recovery.

Personal Care: Sales in the division rose 26% year over year to $172 million. Sales were driven by the Schulke & Mayr acquisition as well as higher demand across core personal-care end markets, better mix and disciplined pricing.
 
Specialty Additives: Sales in the segment increased 15% year over year to $182 million, led by strong demand for architectural coatings and other additives, disciplined pricing and improved mix.

Intermediates: Sales in the segment went up 78% year over year to $66 million, led by higher prices in all product lines.

Financials

Cash and cash equivalents were $964 million at the end of the quarter, up around 158% year over year. Long-term debt was $1,336 million, down around 15% year over year.

Cash flows provided by operating activities were $16 million in the reported quarter, down from $38 million in the prior-year quarter.

Outlook

Ashland continues to expect sales in the range of $2.25-$2.35 billion for fiscal 2022. It also anticipates adjusted EBITDA between $550 million and $570 million.

The company noted that it sees underlying demand to remain strong for its focused ingredients and additives product portfolio. It expects its pricing and mix improvement actions to cover the current inflation. The company remains committed to take further measures to recover any additional cost inflation. It will also continue to build inventories to mitigate the supply-chain and shipping headwinds.

Price Performance

Shares of Ashland have gained 8.2% in the past year compared with a 16.3% decline of the industry.

 

Zacks Investment Research
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Zacks Rank & Other Key Picks

Ashland currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks worth considering in the basic materials space include Nutrien Ltd. (NTR - Free Report) , AdvanSix Inc. (ASIX - Free Report) and Commercial Metals Company (CMC - Free Report) .

Nutrien, sporting a Zacks Rank #1 (Strong Buy), has an expected earnings growth rate of 127.9% for the current year. The Zacks Consensus Estimate for NTR's current-year earnings has been revised 34.3% upward over the last 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.

Nutrien beat the Zacks Consensus Estimate for earnings in three of the last four quarters while missing once. It has a trailing four-quarter earnings surprise of roughly 60.3%, on average. NTR has rallied around 78% in a year.

AdvanSix, carrying a Zacks Rank #1, has an expected earnings growth rate of 54.7% for the current year. ASIX's consensus estimate for current-year earnings has been revised 35% upward in the past 60 days.

AdvanSix beat the Zacks Consensus Estimate for earnings in three of the trailing four quarters while missed once. It has a trailing four-quarter earnings surprise of roughly 23.6%, on average. ASIX has rallied around 51% in a year.

Commercial Metals, carrying a Zacks Rank #1, has a projected earnings growth rate of 78.2% for the current fiscal year. The Zacks Consensus Estimate for CMC's current fiscal year earnings has been revised 31.9% upward over the past 60 days.

Commercial Metals beat the Zacks Consensus Estimate for earnings in three of the last four quarters while missed once. It has a trailing four-quarter earnings surprise of roughly 16%, on average. CMC has gained around 36% in a year.