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Element's (ESI) Q4 Earnings In Line, Revenues Lag Estimates
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Element Solutions Inc. (ESI - Free Report) recorded earnings of 32 cents per share in fourth-quarter 2023 compared with earnings of 5 cents in the year-ago quarter. The figure was in line with the Zacks Consensus Estimate.
The company generated net sales of $573.4 million, flat year over year. The figure missed the Zacks Consensus Estimate of $588.6 million. Organic net sales fell 3%.
The company’s circuitry and semiconductor businesses returned to organic growth in the reported quarter. ESI also delivered adjusted EBITDA growth of 11% in the quarter.
Element Solutions Inc. Price, Consensus and EPS Surprise
Net sales in the Electronics segment rose 4% year over year to $352 million in the reported quarter. Organic net sales were down 1% from the previous year's reported figure. The figure fell short of our estimate of $416.9 million.
In the Industrial & Specialty segment, net sales declined 6% year over year to $221 million, with organic net sales dropping 7%. The figure was above our estimate of $148.3 million.
FY23 Results
Earnings for full-year 2023 were 48 cents per share, down from 75 cents per share a year ago. Net sales declined around 8% year over year to $2,333.2 million.
Financial Position
Element Solutions ended 2023 with cash and cash equivalents of $289.3 million, up around 9% year over year. Long-term debt was $1,921 million at the end of the quarter, up around 2% year over year.
Cash from operating activities was $334 million in 2023. Free cash flow was $282 million for the year.
Outlook
ESI expects adjusted EBITDA in the range of $510-$530 million for 2024. For first-quarter 2024, it sees adjusted EBITDA in the band of $120-$125 million.
The company anticipates generating a free cash flow in the range of $280-$300 million for 2024.
Price Performance
Shares of Element Solutions have gained 20.6% in a year compared with a 24.9% rise of the industry.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
ESI currently has a Zacks Rank #3 (Hold).
Better-ranked stocks worth a look in the basic materials space include, Carpenter Technology Corporation (CRS - Free Report) , Alpha Metallurgical Resources Inc. (AMR - Free Report) and Hawkins, Inc. (HWKN - Free Report) .
The consensus estimate for Carpenter Technology’s current fiscal year earnings is pegged at $4.00, indicating a year-over-year surge of 250.9%. CRS beat the Zacks Consensus Estimate in three of the last four quarters while matching it once, with the average earnings surprise being 12.2%. The company’s shares have gained around 35% in the past year. CRS currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Alpha Metallurgical Resources’ current-year earnings has been revised upward by 8.8% in the past 60 days. It currently carries a Zacks Rank #1. AMR delivered a trailing four-quarter earnings surprise of roughly 9.6%, on average. AMR shares are up around 120% in a year.
The consensus estimate for Hawkins’ current fiscal year earnings is pegged at $3.61 per share, indicating a year-over-year rise of 26.2%. The Zacks Consensus Estimate for HWKN’s current-year earnings has been revised 4.3% upward in the past 30 days. HWKN, a Zacks Rank #2 (Buy) stock, beat the consensus estimate in each of the last four quarters, with the average earnings surprise being 30.6%. The company’s shares have rallied roughly 72% in the past year.
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Element's (ESI) Q4 Earnings In Line, Revenues Lag Estimates
Element Solutions Inc. (ESI - Free Report) recorded earnings of 32 cents per share in fourth-quarter 2023 compared with earnings of 5 cents in the year-ago quarter. The figure was in line with the Zacks Consensus Estimate.
The company generated net sales of $573.4 million, flat year over year. The figure missed the Zacks Consensus Estimate of $588.6 million. Organic net sales fell 3%.
The company’s circuitry and semiconductor businesses returned to organic growth in the reported quarter. ESI also delivered adjusted EBITDA growth of 11% in the quarter.
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 rose 4% year over year to $352 million in the reported quarter. Organic net sales were down 1% from the previous year's reported figure. The figure fell short of our estimate of $416.9 million.
In the Industrial & Specialty segment, net sales declined 6% year over year to $221 million, with organic net sales dropping 7%. The figure was above our estimate of $148.3 million.
FY23 Results
Earnings for full-year 2023 were 48 cents per share, down from 75 cents per share a year ago. Net sales declined around 8% year over year to $2,333.2 million.
Financial Position
Element Solutions ended 2023 with cash and cash equivalents of $289.3 million, up around 9% year over year. Long-term debt was $1,921 million at the end of the quarter, up around 2% year over year.
Cash from operating activities was $334 million in 2023. Free cash flow was $282 million for the year.
Outlook
ESI expects adjusted EBITDA in the range of $510-$530 million for 2024. For first-quarter 2024, it sees adjusted EBITDA in the band of $120-$125 million.
The company anticipates generating a free cash flow in the range of $280-$300 million for 2024.
Price Performance
Shares of Element Solutions have gained 20.6% in a year compared with a 24.9% rise of the industry.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
ESI currently has a Zacks Rank #3 (Hold).
Better-ranked stocks worth a look in the basic materials space include, Carpenter Technology Corporation (CRS - Free Report) , Alpha Metallurgical Resources Inc. (AMR - Free Report) and Hawkins, Inc. (HWKN - Free Report) .
The consensus estimate for Carpenter Technology’s current fiscal year earnings is pegged at $4.00, indicating a year-over-year surge of 250.9%. CRS beat the Zacks Consensus Estimate in three of the last four quarters while matching it once, with the average earnings surprise being 12.2%. The company’s shares have gained around 35% in the past year. CRS currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Alpha Metallurgical Resources’ current-year earnings has been revised upward by 8.8% in the past 60 days. It currently carries a Zacks Rank #1. AMR delivered a trailing four-quarter earnings surprise of roughly 9.6%, on average. AMR shares are up around 120% in a year.
The consensus estimate for Hawkins’ current fiscal year earnings is pegged at $3.61 per share, indicating a year-over-year rise of 26.2%. The Zacks Consensus Estimate for HWKN’s current-year earnings has been revised 4.3% upward in the past 30 days. HWKN, a Zacks Rank #2 (Buy) stock, beat the consensus estimate in each of the last four quarters, with the average earnings surprise being 30.6%. The company’s shares have rallied roughly 72% in the past year.