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PolyOne (POL) Q1 Earnings Beat Estimates, Revenues Miss

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PolyOne Corporation logged earnings from continuing operations of 38 cents per share for the first quarter of 2020, up from 29 cents in the year-ago quarter.

Barring one-time items, earnings were 48 cents per share for the quarter, up from 43 cents in the year-ago quarter. Moreover, earnings surpassed the Zacks Consensus Estimate of 44 cents. The bottom line was driven by improved margins in all three of the company’s segments and an uptick in orders in Asia.

Revenues dropped 5.2% year over year to $711.5 million in the quarter. The top line missed the Zacks Consensus Estimate of $743.2 million.

PolyOne Corporation Price, Consensus and EPS Surprise

 

Segment Highlights

Revenues from the Color, Additives and Inks division fell 2.6% year over year to $256.5 million for the reported quarter. Segmental operating income increased 2.5% year over year to $40.5 million.

Revenues from the Specialty Engineered Materials unit fell 2.4% year over year to $185.3 million. Operating income climbed 8.8% year over year to $22.3 million.

The Distribution segment’s sales went down 8.7% to $289.5 million. Operating income was almost flat year over year at $19.4 million.

Financials

The company ended the quarter with cash and cash equivalents of $1,280.2 million, showing around a 12-fold increase year over year. Long-term debt stood at $1,209.7 million, down 16% year over year.

Outlook

PolyOne expects lower demand, most notably for transportation and consumer discretionary items, in the coming months.

The company does not intend to offer any specific outlook for the second quarter or the rest of the year at this time due to uncertainties in the global market.

Price Performance

PolyOne’s shares are down 20.7% in a year compared with the 49.7% decline of the industry it belongs to.

 

 

Zacks Rank & Stocks to Consider

The company currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space are Kinross Gold Corporation (KGC - Free Report) , Barrick Gold Corporation (GOLD - Free Report) and Franco-Nevada Corporation (FNV - Free Report) .

Kinross has a projected earnings growth rate of 50% for 2020. The company’s shares have surged 115.3% in a year. It currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Barrick Gold currently sports a Zacks Rank #1 and has a projected earnings growth rate of 60.8% for 2020. The company’s shares have gained 108.2% in a year.

Franco-Nevada has a projected earnings growth rate of 19.2% for 2020. It currently carries a Zacks Rank #2 (Buy). The company’s shares have rallied 92.2% in a year.

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