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Ingevity (NGVT) Q2 Earnings & Revenues Beat Estimates

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Ingevity Corporation (NGVT - Free Report) recorded a profit (attributable to stockholders) of $46.7 million or $1.10 per share in second-quarter 2018, surging roughly 45% from $32.1 million or 76 cents a year ago.

Barring one-time items, earnings came in at $1.12 per share in the quarter, surpassing the Zacks Consensus Estimate of 99 cents.

The company’s revenues rose roughly 19% year over year to $308.6 million in the quarter, squeaking past the Zacks Consensus Estimate of $308.2 million.

Adjusted EBITDA climbed roughly 33% year over year to $89.4 million in the quarter.

The chemical maker gained from strong organic growth, contributions of Georgia-Pacific pine chemicals acquisition, excellent commercial and operational execution and strong productivity.

Ingevity Corporation Price, Consensus and EPS Surprise

 

Ingevity Corporation Price, Consensus and EPS Surprise | Ingevity Corporation Quote

Segment Review

Revenues from the Performance Chemicals division jumped around 24% year over year to $212.5 million in the quarter. Revenues were driven by sales growth in oilfield industry on the back of higher U.S. drilling and production, along with the strong adoption of the company’s pavement technologies. The buyout of Georgia-Pacific pine chemicals business also supported the growth.   

Revenues from the Performance Materials unit went up around 7% to $96.1 million. The growth was supported by strong volumes of the company’s solutions geared to meet the U.S. EPA Tier 3 and California LEV III emission regulations.

Balance Sheet

Ingevity ended the quarter with cash and cash equivalents of $83 million, a more than two-fold year over year increase. Long-term debt was $729.5 million, up around 57%.

Outlook

Ingevity remains optimistic about 2018 as it is witnessing the benefits of improving market conditions for its basic materials and high-value added technologies. The company increased the mid-point and narrowed the range for its 2018 guidance for adjusted EBITDA to $302-$314 million from $293-$307 million. The company backed its sales guidance of between $1.10 billion and $1.13 billion for the year.

Price Performance

Shares of Ingevity have rallied 53.4% over a year, significantly outperforming the industry’s 1.5% decline.



 

Zacks Rank & Stocks to Consider

Ingevity currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks worth considering in the basic materials space include KMG Chemicals, Inc. , Methanex Corporation (MEOH - Free Report) and BHP Billiton Limited (BHP - Free Report) each carrying a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

KMG Chemicals has an expected long-term earnings growth rate of 28.5%. Its shares have gained roughly 41% over a year.

Methanex has an expected long-term earnings growth rate of 15%. The company’s shares have rallied around 52% in a year.

BHP Billiton has an expected long-term earnings growth rate of 5.3%. Its shares have shot up roughly 24% over a year.

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