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Why Is Ashland (ASH) Down 5.4% Since Last Earnings Report?
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It has been about a month since the last earnings report for Ashland (ASH - Free Report) . Shares have lost about 5.4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Ashland due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Ashland's Earnings Beat Estimates in Q1, Revenues Lag
Ashland recorded profits of $40 million or 73 cents per share in the first quarter of fiscal 2023 (ending Dec 31, 2022), down from $48 million or 83 cents in the prior-year quarter.
Barring one-time items, adjusted earnings came in at 97 cents per share, up from the year-ago quarter’s figure of 88 cents. It topped the Zacks Consensus Estimate of 95 cents.
Sales rose around 3% year over year to $525 million. It missed the Zacks Consensus Estimate of $525.9 million. The top line was driven mainly by disciplined pricing actions leading to a recovery in costs as well as strong demand for pharmaceutical ingredients, partly offset by demand weakness in China due COVID-19 restrictions and significant inventory destocking particularly in China and Europe.
Segment Highlights
Life Sciences: Sales in the segment were up 22% year over year to $207 million in the reported quarter, aided by double-digit growth to pharmaceutical customers reflecting cost recovery and strong demand.
Personal Care: Sales in the division fell 6% year over year to $138 million. Disciplined pricing was offset by lower sales in China mainly due to COVID-19 policies and inventory destocking within the distribution channel. Specialty Additives: Sales in the segment fell 8% year over year to $143 million, hurt by the impact of COVID-19 restrictions in China and inventory destocking in China and Europe.
Intermediates: Sales in the segment went up 2% year over year to $54 million, led by higher merchant-market prices.
Financials
Cash and cash equivalents were $532 million at the end of the quarter, up around 174% year over year. Long-term debt was $1,316 million, down around 17% year over year.
Cash flows used by operating activities were $29 million in the reported quarter.
Outlook
Ashland continues to expect sales in the range of $2.5-$2.7 billion for fiscal 2023. It also anticipates adjusted EBITDA to be within the $600-$650 million range for the full fiscal.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
The consensus estimate has shifted 5.23% due to these changes.
VGM Scores
At this time, Ashland has a poor Growth Score of F, however its Momentum Score is doing a lot better with a B. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Ashland has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Ashland is part of the Zacks Chemical - Specialty industry. Over the past month, PPG Industries (PPG - Free Report) , a stock from the same industry, has gained 0.9%. The company reported its results for the quarter ended December 2022 more than a month ago.
PPG Industries reported revenues of $4.19 billion in the last reported quarter, representing a year-over-year change of -0.1%. EPS of $1.22 for the same period compares with $1.26 a year ago.
For the current quarter, PPG Industries is expected to post earnings of $1.18 per share, indicating a change of -13.9% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.
PPG Industries has a Zacks Rank #4 (Sell) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.
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Why Is Ashland (ASH) Down 5.4% Since Last Earnings Report?
It has been about a month since the last earnings report for Ashland (ASH - Free Report) . Shares have lost about 5.4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Ashland due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Ashland's Earnings Beat Estimates in Q1, Revenues Lag
Ashland recorded profits of $40 million or 73 cents per share in the first quarter of fiscal 2023 (ending Dec 31, 2022), down from $48 million or 83 cents in the prior-year quarter.
Barring one-time items, adjusted earnings came in at 97 cents per share, up from the year-ago quarter’s figure of 88 cents. It topped the Zacks Consensus Estimate of 95 cents.
Sales rose around 3% year over year to $525 million. It missed the Zacks Consensus Estimate of $525.9 million. The top line was driven mainly by disciplined pricing actions leading to a recovery in costs as well as strong demand for pharmaceutical ingredients, partly offset by demand weakness in China due COVID-19 restrictions and significant inventory destocking particularly in China and Europe.
Segment Highlights
Life Sciences: Sales in the segment were up 22% year over year to $207 million in the reported quarter, aided by double-digit growth to pharmaceutical customers reflecting cost recovery and strong demand.
Personal Care: Sales in the division fell 6% year over year to $138 million. Disciplined pricing was offset by lower sales in China mainly due to COVID-19 policies and inventory destocking within the distribution channel.
Specialty Additives: Sales in the segment fell 8% year over year to $143 million, hurt by the impact of COVID-19 restrictions in China and inventory destocking in China and Europe.
Intermediates: Sales in the segment went up 2% year over year to $54 million, led by higher merchant-market prices.
Financials
Cash and cash equivalents were $532 million at the end of the quarter, up around 174% year over year. Long-term debt was $1,316 million, down around 17% year over year.
Cash flows used by operating activities were $29 million in the reported quarter.
Outlook
Ashland continues to expect sales in the range of $2.5-$2.7 billion for fiscal 2023. It also anticipates adjusted EBITDA to be within the $600-$650 million range for the full fiscal.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
The consensus estimate has shifted 5.23% due to these changes.
VGM Scores
At this time, Ashland has a poor Growth Score of F, however its Momentum Score is doing a lot better with a B. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Ashland has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Ashland is part of the Zacks Chemical - Specialty industry. Over the past month, PPG Industries (PPG - Free Report) , a stock from the same industry, has gained 0.9%. The company reported its results for the quarter ended December 2022 more than a month ago.
PPG Industries reported revenues of $4.19 billion in the last reported quarter, representing a year-over-year change of -0.1%. EPS of $1.22 for the same period compares with $1.26 a year ago.
For the current quarter, PPG Industries is expected to post earnings of $1.18 per share, indicating a change of -13.9% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.
PPG Industries has a Zacks Rank #4 (Sell) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.