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Olin (OLN) Surpasses Earnings and Revenue Estimates in Q1

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Olin Corporation (OLN - Free Report) posted a profit of $393 million or $2.48 per share in first-quarter 2022 compared with $243.6 million or $1.51 per share in the year-ago quarter. The earnings figure beat the Zacks Consensus Estimate of $2.33.

The chemical maker’s revenues rose roughly 28.3% year over year to $2,461.4 million in the quarter. It also surpassed the Zacks Consensus Estimate of $2,347.6 million. The company saw higher sales across its segments in the first quarter. OLN benefited from higher pricing in the quarter.

Olin Corporation Price, Consensus and EPS Surprise

 

Olin Corporation Price, Consensus and EPS Surprise

Olin Corporation price-consensus-eps-surprise-chart | Olin Corporation Quote

 

Segment Review

Chlor Alkali Products and Vinyls: Revenues in the division rose roughly 43.6% year over year to $1,245.2 million in the reported quarter as lower volumes were more than offset by higher pricing.

Epoxy: Revenues in the division went up around 19.2% year over year to $789.5 million on higher prices.

Winchester: Revenues increased 9.6% year over year to $426.7 million on higher commercial ammunition pricing.

Financials

Olin ended the first quarter with cash and cash equivalents of $197.9 million, down roughly 23.9% year over year. Long-term debt was $2,578.9 million at the end of the quarter, down around 30.4% year over year.

Outlook

Olin expects second-quarter 2022 results to be higher than first-quarter 2022 levels in its Chemicals businesses, amid sequentially higher raw material and operating costs, particularly increased natural gas and electrical power costs.

Its Chlor Alkali Products and Vinyls second-quarter results are projected to improve sequentially despite roughly $75 million of lower margin from lost sales and production volumes, increased maintenance expenses and other costs, led by the unplanned production outage at its Plaquemine, LA facility. Its Epoxy business expects to continue absorbing weaker epoxy resin demand and operate at low rates. With recently-announced price increases for ammunition and primers expected to offset higher commodity and other materials costs, the company expects Winchester’s second-quarter results to be similar to first-quarter 2022 levels.

Price Performance

Shares of Olin have surged 28.3% in the past year against a 7.1% decline of the industry.

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Zacks Rank & Other Key Picks

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

Some better-ranked stocks in the basic materials space are The Mosaic Company (MOS - Free Report) , AdvanSix Inc. (ASIX - Free Report) and Allegheny Technologies Incorporated (ATI - Free Report) .

Mosaic has a projected earnings growth rate of 143.5% for the current year. The Zacks Consensus Estimate for MOS' current-year earnings has been revised 39.7% upward in the past 60 days.

Mosaic’s earnings beat the Zacks Consensus Estimate in three of the last four quarters, while missing once. It delivered a trailing four-quarter earnings surprise of roughly 3.7%, on average. MOS has rallied around 78.2% in a year and currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

AdvanSix has a projected earnings growth rate of 54.7% for the current year. The Zacks Consensus Estimate for ASIX’s current-year earnings has been revised 43.6% upward in the past 60 days.

AdvanSix’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, the average being 23.6%. ASIX has surged 40.8% in a year. The company carries a Zacks Rank #2 (Buy).

Allegheny, currently sporting a Zacks Rank #1, has an expected earnings growth rate of 707.7% for the current year. The Zacks Consensus Estimate for ATI's earnings for the current year has been revised 6.1% upward in the past 60 days.

Allegheny’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 127.2%. ATI has rallied around 15% over a year.


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