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Ingevity's (NGVT) Earnings and Sales Surpass Estimates in Q1

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Ingevity Corporation (NGVT - Free Report) recorded profits of $60.8 million or $1.55 per share in first-quarter 2022, up from a profit of $48.7 million or $1.20 in the year-ago quarter.

Excluding one-time items, adjusted earnings in the quarter were $1.62 per share, up from $1.27 a year ago. The figure topped the Zacks Consensus Estimate of $1.11.

The company’s revenues rose around 20% year over year to a record $382.8 million in the quarter, beating the Zacks Consensus Estimate of $344 million. In the first quarter, the company benefited from actions to increase prices on strong end-market demand, which helped it offset inflationary cost pressures.

Adjusted EBITDA went up roughly 13% year over year to $119 million in the quarter.

 

Ingevity Corporation Price, Consensus and EPS Surprise

 

 

Ingevity Corporation Price, Consensus and EPS Surprise

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

 

Segment Review

The Performance Chemicals division generated revenues of $234.4 million in the reported quarter, rising around 31% year over year, mainly on strong volume growth and price increases driven by strong demand. Sales rose around 34% in Engineered Polymers while sales in Industrial Specialties applications went up roughly 29% as price hikes offset higher costs.

Revenues in the Performance Materials unit increased around 6% year over year to $148.4 million, aided by regional mix shifts in automotive products sales as well as higher volume and price increases in process purification products.

Financials

Ingevity ended the quarter with cash and cash equivalents of $222.6 million, down around 6% year over year. Long-term debt was $945.6 million, down roughly 25% year over year.

Operating cash flow was $24.3 million for the reported quarter, down around 52% year over year.

Outlook

The company raised the top ends of its guidance ranges for 2022. It now expects sales in the band of $1.525-$1.65 billion, compared with $1.525-$1.6 billion it expected earlier. Adjusted EBITDA is now forecast between $430 million and $470 million, compared with the prior view of $430 million and $460 million.

Price Performance

Shares of Ingevity have declined 24.4% in a year against a 15.9% decline of the industry.

 

Zacks Investment Research
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Zacks Rank & Key Picks

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

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

Steel Dynamics, sporting a Zacks Rank #1 (Strong Buy), has an expected earnings growth rate of 18.5% for the current year. The Zacks Consensus Estimate for STLD's current-year earnings has been revised 32.5% upward over the last 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.

Steel Dynamics beat the Zacks Consensus Estimate for earnings in each of the last four quarters, the average being roughly 2.5%. STLD has gained around 29% 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 23% in a year.

AdvanSix, carrying a Zacks Rank #1, has an expected earnings growth rate of 63.4% for the current year. ASIX's consensus estimate for current-year earnings has been revised 31.9% 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 48% in a year.