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Quaker Chemical (KWR) Q1 Earnings In Line, Sales Lag Estimates

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Quaker Chemical Corporation's (KWR - Free Report) recorded profits of $19.8 million or $1.11 per share in the first quarter of 2022, down from $38.6 million or $2.15 a year ago.

Barring one-time items, earnings came in at $1.42 per share for the reported quarter, matching the Zacks Consensus Estimate.

Net sales rose around 10% year over year to $474.2 million in the quarter. It missed the Zacks Consensus Estimate of $478.2 million. Higher selling price and product mix as well as additional net sales from acquisitions were partly offset by lower organic sales volumes and the unfavorable impact from foreign currency swings.  

The increase in selling price and product mix was mainly attributable to the company’s actions to implement broad price increases in an effort to offset raw material cost inflation and supply-chain and logistics cost pressures. Selling prices increased 17% year over year in the first quarter.

Segment Highlights

Sales from the Americas segment rose 14% year over year to $154.1 million in the reported quarter. The same for the EMEA unit was up around 5% year over year $125.7 million. The Asia/Pacific unit logged sales of $104.2 million, up around 8% year over year. Sales from the Global Specialty Businesses division went up around 15% year over year to $90.1 million.

All four segments gained from double-digit increases in selling price and product mix and additional net sales from acquisitions in the reported quarter.

Financials

The company ended the quarter with cash and cash equivalents of around $161.6 million, down roughly 1% year over year. Long-term debt was $858.3 million, essentially flat year over year.

Net operating cash outflow was $6.3 million for the quarter, improving from $12.6 million a year ago.

Outlook

Quaker Chemical said that it is implementing further price actions to mitigate the impact of the ongoing and expected cost pressures. Although uncertainties associated with pandemic-related restrictions in China and the ongoing Russia-Ukraine conflict prevail, the company is encouraged by the favorable demand environment and its ability to capture price.

Price Performance

Quaker Chemical’s shares are down 33% in the past year compared with industry’s 18.7% decline.

 

Zacks Investment Research
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Zacks Rank & Stocks to Consider

Quaker Chemical carries a Zacks Rank #4 (Sell).

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 21% 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 18% 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 46% in a year.


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