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Element Solutions (ESI) Up 6.9% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for Element Solutions (ESI - Free Report) . Shares have added about 6.9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Element Solutions due for a pullback? 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 catalysts.
Element's Q4 Earnings in Line, Revenues Lag Estimates
Element Solutions recorded earnings of 32 cents per share in fourth-quarter 2023 compared with earnings of 5 cents per share 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 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. It also delivered adjusted EBITDA growth of 11% in the quarter.
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
Element Solutions expects adjusted EBITDA in the range of $510-$530 million for 2024. For first-quarter 2024, it anticipated 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.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
The consensus estimate has shifted -6.86% due to these changes.
VGM Scores
Currently, Element Solutions has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% 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 downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Element Solutions 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
Element Solutions belongs to the Zacks Chemical - Specialty industry. Another stock from the same industry, Ecolab (ECL - Free Report) , has gained 5.4% over the past month. More than a month has passed since the company reported results for the quarter ended December 2023.
Ecolab reported revenues of $3.94 billion in the last reported quarter, representing a year-over-year change of +7.3%. EPS of $1.55 for the same period compares with $1.27 a year ago.
For the current quarter, Ecolab is expected to post earnings of $1.33 per share, indicating a change of +51.1% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.
Ecolab has a Zacks Rank #1 (Strong Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.
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Element Solutions (ESI) Up 6.9% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Element Solutions (ESI - Free Report) . Shares have added about 6.9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Element Solutions due for a pullback? 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 catalysts.
Element's Q4 Earnings in Line, Revenues Lag Estimates
Element Solutions recorded earnings of 32 cents per share in fourth-quarter 2023 compared with earnings of 5 cents per share 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 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. It also delivered adjusted EBITDA growth of 11% in the quarter.
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
Element Solutions expects adjusted EBITDA in the range of $510-$530 million for 2024. For first-quarter 2024, it anticipated 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.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
The consensus estimate has shifted -6.86% due to these changes.
VGM Scores
Currently, Element Solutions has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% 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 downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Element Solutions 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
Element Solutions belongs to the Zacks Chemical - Specialty industry. Another stock from the same industry, Ecolab (ECL - Free Report) , has gained 5.4% over the past month. More than a month has passed since the company reported results for the quarter ended December 2023.
Ecolab reported revenues of $3.94 billion in the last reported quarter, representing a year-over-year change of +7.3%. EPS of $1.55 for the same period compares with $1.27 a year ago.
For the current quarter, Ecolab is expected to post earnings of $1.33 per share, indicating a change of +51.1% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.
Ecolab has a Zacks Rank #1 (Strong Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.