Back to top

Image: Bigstock

Why Is Ingevity Corporation (NGVT) Down 13.3% Since Last Earnings Report?

Read MoreHide Full Article

It has been about a month since the last earnings report for Ingevity Corporation (NGVT - Free Report) . Shares have lost about 13.3% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Ingevity Corporation due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Ingevity's Earnings Beat Estimates in Q1, Sales Lag

Ingevity logged profits (attributable to stockholders) of $22.7 million or 54 cents per share in first-quarter 2019, down around 26% from $30.8 million or 72 cents a year ago. The bottom line in the reported quarter was hurt by acquisition costs.

Adjusted earnings per share for the quarter were 99 cents, up from 79 cents a year ago. The results surpassed the Zacks Consensus Estimate of 95 cents.

The company’s revenues rose roughly 18% year over year to $276.8 million in the quarter, but fell short of the Zacks Consensus Estimate of $278.4 million.

Adjusted EBITDA climbed roughly 24% year over year to $83.5 million in the quarter. The company gained from strong growth in its Performance Materials unit as well as better pricing and mix in its performance chemicals applications.

Segment Review

Revenues from the Performance Chemicals division climbed around 20% year over year to $167.7 million in the quarter. Revenues were driven by the addition of the engineered polymers product line through the acquisition of the Capa caprolactone business and sales growth in oilfield applications.

Revenues from the Performance Materials unit went up around 14% to $109.1 million. The growth was supported by sustained adoption of the company’s solutions geared to meet the U.S. EPA Tier 3 and California LEV III automotive emission regulations.

Balance Sheet

Ingevity ended the quarter with cash and cash equivalents of $38.4 million, down around 30% year over year. Long-term debt was $1,403.2 million, up around 91%.

Outlook

Ingevity reaffirmed its sales guidance of between $1.30 billion and $1.36 billion for 2019. It also backed its adjusted EBITDA guidance for the year in the band of $390-$410 million. The company is working to boost margins and profitability in its Performance Chemicals unit and integrate the acquired engineered polymers product line.
 

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates flatlined during the past month.

VGM Scores

Currently, Ingevity Corporation has a subpar Growth Score of D, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Ingevity Corporation has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Ingevity Corporation (NGVT) - free report >>

Published in