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Element Solutions (ESI) Earnings and Sales Beat Estimates in Q4

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Element Solutions Inc. (ESI - Free Report) recorded earnings (as reported) from continuing operations of 5 cents per share in fourth-quarter 2022 compared with 2 cents in the year-ago quarter.

Adjusted earnings per share came in at 29 cents in the quarter, which beat the Zacks Consensus Estimate of 28 cents.

The company generated net sales of $573.8 million, down around 11% year over year. The figure surpassed the Zacks Consensus Estimate of $558.8 million. Organic net sales rose 3%. The company faced headwinds from the weakening of demand in high-end electronics markets due to the slowdown of industrial activities in China resulting from lockdowns.

 

Element Solutions Inc. Price, Consensus and EPS Surprise

 

Element Solutions Inc. Price, Consensus and EPS Surprise

Element Solutions Inc. price-consensus-eps-surprise-chart | Element Solutions Inc. Quote

 

Segment Highlights

Net sales in the Electronics segment fell 18% year over year to $338 million in the reported quarter. Organic net sales were flat compared with the year-ago quarter’s reported figure.

Net sales in the Industrial & Specialty were flat year over year at $236 million. Organic net sales moved up 7% year over year.

FY22 Results

Earnings for full-year 2022 were 75 cents per share compared with 82 cents per share a year ago. Net sales rose around 6% year over year to $2,549.4 million.

Financial Position

Element Solutions ended 2022 with cash and cash equivalents of $265.6 million, down around 20% year over year. Long-term debt was $1,883.8 million at the end of the quarter, essentially flat year over year.

Cash from operating activities was $296 million for 2022. Free cash flow was $253 million for the year.

The company repurchased 8 million shares of its common stock during 2022.

Outlook

The company expects adjusted EBITDA for 2023 in the range of $510-$530 million. It sees full-year 2023 adjusted earnings per share in the range of $1.40-$1.43. ESI anticipates generating free cash flow of roughly $275 million for 2023.

The company also forecasts adjusted EBITDA to rise 1-3% sequentially in first-quarter 2023.

Price Performance

Shares of Element Solutions have lost 16.8% in a year against a 14.8% decline of the industry.

 

Zacks Investment Research
Image Source: Zacks Investment Research

 

Zacks Rank & Other Key Picks

Element Solutions currently 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 Nucor Corporation (NUE - Free Report) .

Steel Dynamics currently sports a Zacks Rank #1 (Strong Buy). The Zacks Consensus Estimate for STLD's current-year earnings has been revised 22.3% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.

Steel Dynamics’ earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 11.3%, on average. STLD has rallied around 73% in a year.

Commercial Metals currently carries a Zacks Rank #1. The consensus estimate for CMC's current-year earnings has been revised 10% upward in the past 60 days.

Commercial Metals’ earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 16.7%, on average. CMC has gained around 39% in a year.

Nucor currently carries a Zacks Rank #1. The Zacks Consensus Estimate for NUE’s current-year earnings has been revised 12.5% upward in the past 60 days.

Nucor beat Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 7.7% on average. NUE’s shares have gained roughly 26% in the past year.

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