A month has gone by since the last earnings report for Huntsman (HUN - Free Report) . Shares have lost about 27.4% 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 its most recent earnings report in order to get a better handle on the important catalysts.
Huntsman's Earnings and Revenues Beat Estimates in Q4
Huntsman swung to a profit of $308 million or $1.34 per share in fourth-quarter 2019 from a loss of $315 million or $1.43 in the year-ago quarter.
Barring one-time items, adjusted earnings per share were 29 cents in the quarter, down from 38 cents in the year-ago quarter. The figure topped the Zacks Consensus Estimate of 28 cents.
Revenues were $1,657 million, down around 9% year over year. However, it surpassed the Zacks Consensus Estimate of $1,584.7 million. The company saw lower sales across its business segments in the reported quarter. It witnessed lower volumes and prices in most of its businesses.
Earnings for 2019 were $2.44 per share, up from $1.39 per share a year ago. Adjusted earnings per share for the year were $1.53, down from $2.66 a year ago.
Revenues were $6,797 million for the full year, down around 11% year over year.
Polyurethanes: Revenues in the segment fell 3% year over year to $980 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 10% to $278 million due to reduced average selling prices as well as lower sales volumes.
Advanced Materials: Revenues in the unit dropped 9% to $241 million due to lower average selling prices and sales volumes.
Textile Effects: Revenues in the division were down 7% to $180 million. The decline was due to lower sales volumes and average selling prices. Volumes were affected by softer demand as a result of uncertainties surrounding the trade conflict.
Huntsman had total cash of $525 million at the end of 2019, up around 54% year over year. Long-term debt was $2,177 million, down around 2% year over year.
Net cash provided by operating activities from continuing operations was $656 million in 2019 compared with net cash provided by operating activities of $704 million in 2018. Huntsman generated free cash flow of $389 million in 2019 compared with $454 million a year ago.
The company repurchased around 10.1 million shares worth roughly $208 million in 2019.
Moving ahead, Huntsman noted that it will remain focused, in 2020, on investing in its downstream and specialty platforms both through acquisitions and organically. It will also remain balanced in its capital allocation including opportunistic share repurchases and maintaining a competitive dividend.
For the Polyurethanes unit, Huntsman expects demand headwinds in several major markets and regions in 2020. It also anticipates differentiated MDI margins to be stable.
For Performance Products, the company sees growth in performance amines. It also expects weak demand in the maleic anhydride with stable margins.
For Advanced Materials, the company expects stable overall margins amid weakness in industrial markets and demand headwind in aerospace.
For Textile Effects unit, Huntsman expects growth in specialty products. It also sees stable volumes and improved margins.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month. The consensus estimate has shifted -44.35% due to these changes.
Currently, Huntsman has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, 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 C. 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.