We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
ASH Q4 Earnings Miss Estimates Despite Strong Segment Growth
Read MoreHide Full Article
Key Takeaways
Ashland's fiscal Q4 adjusted EPS of $1.12 misses estimates by 13.8%, while sales rise 4.2% to $498 million.
ASH's Personal Care sales grow 8%, while Life Sciences gains 4%, supported by strong pharmaceutical demand.
Ashland projects fiscal 2027 sales of $1.905-$1.975 billion and adjusted EBITDA of $405-$435 million.
Ashland Inc. (ASH - Free Report) reported adjusted earnings of $1.12 per share, excluding intangible amortization, for the fourth quarter of fiscal 2026, up 3.7% from $1.08 in the year-ago quarter. The bottom line missed the Zacks Consensus Estimate of $1.3 by 13.8%.
Sales increased 4.2% year over year to $498 million, missing the Zacks Consensus Estimate of $500.7 million by 0.5%. Sales volumes rose 3%, led by growth in pharmaceuticals, personal care, coatings and performance specialties. Pricing increased 2%, while unfavorable currency movements reduced sales by $3 million.
Life Sciences: Sales increased 4% year over year to $180 million in the reported quarter. The figure missed the Zacks Consensus Estimate of $184 million. Growth was driven by higher volumes, broad-based pharmaceutical demand across major regions and technology platforms, including injectables, cellulosics and film coatings. Pharmaceutical sales rose approximately 6%, marking the sixth consecutive quarter of year-over-year volume growth. Nutrition sales declined slightly due to lower volumes.
Personal Care: Sales increased 8% year over year to $163 million from $151 million. The metric beat the consensus estimate of $158 million. Growth reflected strong demand for biofunctional actives and microbial protection, both recording double-digit gains. Hair care sales increased at a double-digit rate, while skin care registered high-single-digit growth. These gains were partly offset by low-single-digit declines in oral care and household sales.
Specialty Additives: Sales remained flat year over year at $131 million and missed the Zacks Consensus Estimate of $139 million. Coatings and performance specialties sales increased 9% and 14%, respectively, supported by favorable volumes, pricing and market-share gains. However, weak demand in energy and resources and lower construction volumes, resulting from deliberate portfolio actions, offset these improvements.
Intermediates: Sales remained unchanged year over year at $33 million. Merchant sales increased 4% to $24 million, supported by favorable product mix, higher N-Methyl-2-pyrrolidone sales and improved pricing. These gains were partly offset by lower merchant butanediol volumes and a $1 million decline in captive sales to $9 million.
ASH's Financial Position and Cash Flow
Cash flows provided by operating activities increased to $90 million from $40 million in the year-ago quarter, primarily reflecting lower working capital. Ongoing free cash flow rose to $74 million from $52 million, with conversion improving to 61% from 44%.
Ashland ended fiscal 2026 with approximately $480 million in cash, total liquidity of $976 million and net debt of $891 million. Net leverage stood at 2.3 times, within the company's long-term target range.
For the full fiscal year, operating cash flow increased to $385 million from $134 million, supported by inventory reductions and improved working-capital management. Ongoing free cash flow reached $232 million, compared with $127 million in fiscal 2025.
Ashland's Fiscal 2027 Outlook
For fiscal 2027, Ashland expects sales between $1.905 billion and $1.975 billion, representing anticipated growth of approximately 2-6% year over year. Adjusted EBITDA is projected between $405 million and $435 million.
Management expects ongoing free cash flow conversion to exceed 40% of adjusted EBITDA, with capital expenditures reaching up to approximately $140 million. Foreign currency movements are expected to create headwinds of $20-$25 million to sales and $7-$10 million to adjusted EBITDA.
The company anticipates resilient demand in Life Sciences and Personal Care, continued momentum in coatings and performance specialties, and additional Intermediates volumes from energy-storage customers.
ASH’s Price Performance
Shares of Ashland have gained 55.2% over the past year compared with the 15% rise in its industry.
Image Source: Zacks Investment Research
ASH’s Zacks Rank & Key Picks
ASH currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Basic Materials space are Reliance, Inc. (RS - Free Report) , Element Solutions Inc. (ESI - Free Report) and Worthington Steel, Inc. (WS - Free Report) .
The Zacks Consensus Estimate for RS’ 2026 earnings is pegged at $26.54 per share, indicating an 86.1% year-over-year surge. RSshares have gained 55.7% over the past year.
The Zacks Consensus Estimate for ESI’s 2026 earnings is pegged at $1.85 per share, indicating a year-over-year rise of 24.2%. Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 6%.
The Zacks Consensus Estimate for WS’ current fiscal-year earnings is pinned at $4.07 per share. WSshares have gained 24% over the past year.
View the Zacks #1 Rank List
Image: Bigstock
ASH Q4 Earnings Miss Estimates Despite Strong Segment Growth
Key Takeaways
Ashland Inc. (ASH - Free Report) reported adjusted earnings of $1.12 per share, excluding intangible amortization, for the fourth quarter of fiscal 2026, up 3.7% from $1.08 in the year-ago quarter. The bottom line missed the Zacks Consensus Estimate of $1.3 by 13.8%.
Sales increased 4.2% year over year to $498 million, missing the Zacks Consensus Estimate of $500.7 million by 0.5%. Sales volumes rose 3%, led by growth in pharmaceuticals, personal care, coatings and performance specialties. Pricing increased 2%, while unfavorable currency movements reduced sales by $3 million.
Ashland Inc. Price, Consensus and EPS Surprise
Ashland Inc. price-consensus-eps-surprise-chart | Ashland Inc. Quote
ASH's Segment Highlights
Life Sciences: Sales increased 4% year over year to $180 million in the reported quarter. The figure missed the Zacks Consensus Estimate of $184 million. Growth was driven by higher volumes, broad-based pharmaceutical demand across major regions and technology platforms, including injectables, cellulosics and film coatings. Pharmaceutical sales rose approximately 6%, marking the sixth consecutive quarter of year-over-year volume growth. Nutrition sales declined slightly due to lower volumes.
Personal Care: Sales increased 8% year over year to $163 million from $151 million. The metric beat the consensus estimate of $158 million. Growth reflected strong demand for biofunctional actives and microbial protection, both recording double-digit gains. Hair care sales increased at a double-digit rate, while skin care registered high-single-digit growth. These gains were partly offset by low-single-digit declines in oral care and household sales.
Specialty Additives: Sales remained flat year over year at $131 million and missed the Zacks Consensus Estimate of $139 million. Coatings and performance specialties sales increased 9% and 14%, respectively, supported by favorable volumes, pricing and market-share gains. However, weak demand in energy and resources and lower construction volumes, resulting from deliberate portfolio actions, offset these improvements.
Intermediates: Sales remained unchanged year over year at $33 million. Merchant sales increased 4% to $24 million, supported by favorable product mix, higher N-Methyl-2-pyrrolidone sales and improved pricing. These gains were partly offset by lower merchant butanediol volumes and a $1 million decline in captive sales to $9 million.
ASH's Financial Position and Cash Flow
Cash flows provided by operating activities increased to $90 million from $40 million in the year-ago quarter, primarily reflecting lower working capital. Ongoing free cash flow rose to $74 million from $52 million, with conversion improving to 61% from 44%.
Ashland ended fiscal 2026 with approximately $480 million in cash, total liquidity of $976 million and net debt of $891 million. Net leverage stood at 2.3 times, within the company's long-term target range.
For the full fiscal year, operating cash flow increased to $385 million from $134 million, supported by inventory reductions and improved working-capital management. Ongoing free cash flow reached $232 million, compared with $127 million in fiscal 2025.
Ashland's Fiscal 2027 Outlook
For fiscal 2027, Ashland expects sales between $1.905 billion and $1.975 billion, representing anticipated growth of approximately 2-6% year over year. Adjusted EBITDA is projected between $405 million and $435 million.
Management expects ongoing free cash flow conversion to exceed 40% of adjusted EBITDA, with capital expenditures reaching up to approximately $140 million. Foreign currency movements are expected to create headwinds of $20-$25 million to sales and $7-$10 million to adjusted EBITDA.
The company anticipates resilient demand in Life Sciences and Personal Care, continued momentum in coatings and performance specialties, and additional Intermediates volumes from energy-storage customers.
ASH’s Price Performance
Shares of Ashland have gained 55.2% over the past year compared with the 15% rise in its industry.
Image Source: Zacks Investment Research
ASH’s Zacks Rank & Key Picks
ASH currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Basic Materials space are Reliance, Inc. (RS - Free Report) , Element Solutions Inc. (ESI - Free Report) and Worthington Steel, Inc. (WS - Free Report) .
RS and ESI currently sport a Zacks Rank #1 (Strong Buy) each, while WS carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here
The Zacks Consensus Estimate for RS’ 2026 earnings is pegged at $26.54 per share, indicating an 86.1% year-over-year surge. RSshares have gained 55.7% over the past year.
The Zacks Consensus Estimate for ESI’s 2026 earnings is pegged at $1.85 per share, indicating a year-over-year rise of 24.2%. Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 6%.
The Zacks Consensus Estimate for WS’ current fiscal-year earnings is pinned at $4.07 per share. WSshares have gained 24% over the past year.