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Univar (UNVR) Up 4.9% Since Earnings Report: Can It Continue?

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It has been about a month since the last earnings report for Univar Inc. (UNVR - Free Report) . Shares have added about 4.9% in that time frame.

Will the recent positive trend continue leading up to its next earnings release, or is UNVR 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.

Univar's Earnings and Revenues Top Estimates in Q1

Univar logged a profit (on a reported basis) of $65.4 million or 46 cents per share in first-quarter 2018, rising almost three-fold from $22.6 million or 16 cents a year ago.

Barring one-time items, earnings came in at 42 cents per share in the quarter, surpassing the Zacks Consensus Estimate of 38 cents.

The company’s revenues rose 8% year over year to $2,158 million in the quarter, beating the Zacks Consensus Estimate of $2,137 million.

Gross profit rose around 10.7% year over year to $486.6 million in the quarter with gains witnessed across all segments. Adjusted EBITDA margin increased 70 basis points to 7.7%.

Segment Review

Revenues from the USA division increased 4.6% year over year to $1.2 billion in the reported quarter. Gross profit rose 6.1% year over year to $278.9 million.

Revenues from the Canada segment went up around 2% to $313.4 million. Gross profit rose roughly 11.8% to $62.4 million in the quarter.

The EMEA segment raked in sales of $538.6 million, up 22.5%. Gross profit rose around 21.8% to $124 million.

Sales from the Rest of World unit inched up 0.7% to $101.6 million. Gross profit grew 12.7% year over year to $21.3 million.

Balance Sheet

Univar ended the quarter with cash and cash equivalents of $115.9 million, down around 61.4% year over year. Long-term debt was $2,683.5 million, down around 7.6% year over year.

Outlook

For full-year 2018, Univar sees adjusted EBITDA growth of low-double digits. For 2018, adjusted earnings are expected in the range of $1.65-$1.85 per share, up from the previous guidance of $1.60-$1.80.

The company expects strong core business performance in the second quarter of 2018. It expects high single digit growth in adjusted EBITDA for the second quarter.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates flatlined during the past month. There have been two revisions higher for the current quarter compared with two lower.

Univar Inc. Price and Consensus

 

Univar Inc. Price and Consensus | Univar Inc. Quote

VGM Scores

At this time, UNVR has a subpar Growth Score of D. Its Momentum is doing a lot better with a B. 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 C. If you aren't focused on one strategy, this score is the one you should be interested in.

Our style scores indicate that the stock is more suitable for momentum investors than value investors.

Outlook

UNVR has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.




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