It has been about a month since the last earnings report for Huntsman (HUN - Free Report) . Shares have lost about 7.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Huntsman due for a breakout? 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.
Huntsman Misses Earnings, Revenue Estimates in Q2
Huntsman recorded profits of $118 million or 47 cents per share in second-quarter 2019, down 81% from $623 million or $1.71 in the year-ago quarter.
Barring one-time items, adjusted earnings per share were 63 cents in the quarter, down from $1.01 a year ago. The figure trailed the Zacks Consensus Estimate of 65 cents.
Revenues were $2,194 million, down around 9% year over year. Also, it missed the Zacks Consensus Estimate of $2,287.1 million. The company witnessed lower sales across its businesses in the quarter.
Polyurethanes: Revenues in the segment fell around 9% year over year to $1,198 million due to lower MDI and MTBE average selling prices, partly offset by higher MDI and MTBE sales volumes.
Performance Products: Revenues in the unit dropped 9% to $537 million, hurt by reduced average selling prices, partly offset by modestly higher sales volumes.
Advanced Materials: Revenues in the unit decreased around 6% to $275 million due to lower average selling prices and sales volumes.
Textile Effects: Revenues in the division were down roughly 5% to $215 million. Results were impacted by lower sales volumes that more than offset higher average selling prices. Volumes were affected by reduced demand as a result of uncertainties surrounding the U.S.-China trade conflict.
Huntsman had total cash of $449 million at the end of the quarter, up 10% year over year. Long-term debt was $2,277 million, down around 1% year over year.
Net cash provided by operating activities was $304 million for the quarter compared with net cash provided by operating activities of $228 million a year ago. Huntsman generated free cash flow of $240 million in the quarter, up around 38% year over year.
The company repurchased around 4 million shares worth roughly $81 million in the quarter.
Going forward, Huntsman said that it will remain focused on controlling costs, protecting its margins and maintaining a strong balance sheet and cash generation amid economic uncertainties in the second half of 2019. The company will also continue its balanced approach to capital allocation including share buybacks and strategic organic and inorganic growth in its downstream businesses.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision. The consensus estimate has shifted -21.4% due to these changes.
At this time, Huntsman has a nice Growth Score of B, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Huntsman has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.