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Huntsman (HUN) Misses Earnings and Sales Estimates in Q3

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Huntsman Corporation (HUN - Free Report) recorded profits of $41 million or 13 cents per share in third-quarter 2019 against a net loss of $8 million or 5 cents in the year-ago quarter.

Barring one-time items, adjusted earnings per share were 41 cents in the quarter, down from 71 cents in the year-ago quarter. The figure trailed the Zacks Consensus Estimate of 42 cents.

Revenues were $1,687 million, down around 14.3% year over year. Also, it missed the Zacks Consensus Estimate of $1,762.6 million.  

Huntsman Corporation Price, Consensus and EPS Surprise

 

Huntsman Corporation Price, Consensus and EPS Surprise

Huntsman Corporation price-consensus-eps-surprise-chart | Huntsman Corporation Quote

 

Segment Highlights

Polyurethanes: Revenues in the segment fell around 11.8% year over year to $993 million due to lower MDI (methylene diphenyl diisocyanate) average selling prices, which were partly offset by higher MDI sales volumes.

Performance Products: Revenues in the unit declined 14.6% to $281 million due to reduced average selling prices as well as lower sales volumes.

Advanced Materials: Revenues in the unit dropped around 8.2% to $256 million due to lower average selling prices and sales volumes.

Textile Effects: Revenues in the division were down nearly 12.3% to $179 million. The downside was caused by lower sales volumes and average selling prices. Volumes were affected by reduced demand as a result of uncertainties surrounding the U.S.-China trade conflict.

Financials

Huntsman had total cash of $418 million at the end of the quarter, down 40% year over year. Long-term debt was $2,204 million, down around 3.2% year over year.

Net cash provided by operating activities was $257 million in the quarter compared with net cash provided by operating activities of $248 million in the prior-year quarter. Huntsman generated free cash flow of $197 million in the quarter compared with $191 million in the year-ago quarter.

The company repurchased around 4.1 million shares worth roughly $81 million in the quarter.

Outlook

For the Polyurethanes unit, Huntsman expects consistently stable differentiated margins. It anticipates demand headwinds in major markets across the globe. Also, component MDI margins are expected to stay under pressure.

For Performance Products, the company sees growth in key specialty amines. It also expects some demand headwinds in the maleic anhydride but margins are likely to remain stable. Lower margins and volumes are expected to exert pressure on ethyleneamines.

For Advanced Materials, the company expects stable overall margins amid demand headwinds across most industrial markets.

For Textile Effects unit, Huntsman expects to witness persistent pressure from unresolved global trade issues as well as weak global demand.  

For 2019, Huntsman expects to spend around $270 million on capital expenditures and roughly $70 million for the Chemical Intermediates Businesses as discontinued operations.  

Price Performance

Huntsman's shares have gained around 5.7% in the past year against the industry’s 23.5% decline.



 

Zacks Rank & Key Picks

Huntsman currently carries a Zacks Rank #5 (Strong Sell).

Some better-ranked stocks in the basic materials space are Kinross Gold Corporation (KGC - Free Report) , Franco-Nevada Corporation (FNV - Free Report) and Kirkland Lake Gold Ltd. (KL - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Kinross has an expected earnings growth rate of 210% for 2019. The company’s shares have surged 78.7% in the past year.

Franco-Nevada has a projected earnings growth rate of 39.3% for 2019. The company’s shares have rallied 52.2% in a year’s time.

Kirkland Lake Gold has an estimated earnings growth rate of 93.4% for the current year. Its shares have moved up 128.4% in the past year.

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