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Univar's (UNVR) Earnings Trail, Sales Beat Estimates in Q2

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Univar Inc. (UNVR - Free Report) logged a profit (on a reported basis) of $56.1 million or 40 cents per share in second-quarter 2018, compared with net income of $31.3 million or 22 cents a year ago.

Barring one-time items, earnings came in at 47 cents per share in the quarter, missing the Zacks Consensus Estimate by a penny.

The chemical maker’s revenues rose 5.6% year over year to $2,372.6 million in the quarter, beating the Zacks Consensus Estimate of $2,343 million.

Gross profit rose around 7.3% year over year to $500.5 million in the quarter. Adjusted EBITDA margin expanded 20 basis points to 7.3%.

Univar Inc. Price, Consensus and EPS Surprise


Segment Review

Revenues at the USA division increased 10% year over year to $1.3 billion in the reported quarter. Gross profit rose 5.5% year over year to $290.8 million.

Revenues at the Canada segment declined around 8.4% year over year to $450.9 million. Gross profit rose 2.1% year over year to $68.9 million in the quarter.

The EMEA segment raked in sales of $511.9 million, up 10.4% year over year. Gross profit rose around 12.9% year over year to $118.2 million.

Sales from the Rest of World unit inched up 0.2% to $100 million. Gross profit grew 22.2% year over year to $22.6 million.

Balance Sheet

Univar ended the quarter with cash and cash equivalents of $128.6 million, down around 60% year over year. Long-term debt totaled $2,590.1 million, down around 10.5% year over year.


For 2018, Univar continues to expect adjusted EBITDA growth of low-double digits. Adjusted earnings per share for the year are projected in the range of $1.65-$1.85.

Moreover, the company expects low double-digit growth in adjusted EBITDA for the third quarter.

Price Performance

Univar has underperformed the industry over the past six months. The company’s shares have lost 6.2% over this period against the industry’s 0.8% rise.

Zacks Rank & Stocks to Consider

Univar carries a Zacks Rank #4 (Sell).

A few better-ranked stocks in the basic materials space are Celanese Corporation (CE - Free Report) , BHP Billiton Limited (BHP - Free Report) and Steel Dynamics Inc. (STLD - Free Report) .  

Celanese has an expected long-term earnings growth rate of 10% and a Zacks Rank #1 (Strong Buy). The company’s shares have moved up 21.1% in a year. You can see the complete list of today’s Zacks #1 Rank stocks here.

BHP Billiton has an expected long-term earnings growth rate of 5.3%, carrying a Zacks Rank #1. Its shares have rallied roughly 26% in a year’s time.

Steel Dynamics has an expected long-term earnings growth rate of 12% and has a Zacks Rank #2 (Buy). The stock has rallied 31.2% in the past year.

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