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ASH Q4 Earnings Miss Estimates Despite Strong Segment Growth
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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.
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.