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Olin (OLN) Down 10.4% Since Last Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for Olin (OLN - Free Report) . Shares have lost about 10.4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Olin 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.
Olin's Earnings Miss, Revenues Beat Estimates in Q1
Olin slipped to a loss of $80 million or 51 cents per share in first-quarter 2020 from a profit of $41.7 million or 25 cents per share a year ago.
The bottom line in the reported quarter was hurt by planned maintenance turnaround costs.
Excluding one-time items, adjusted loss for the quarter was 41 cents per share, which was wider than the Zacks Consensus Estimate of a loss of 27 cents.
The chemical maker’s revenues fell 8.3% year over year to $1,425.1 million in the quarter. However, it topped the Zacks Consensus Estimate of $1,412.4 million.
The company witnessed continued weakness in caustic soda pricing in the quarter. Lower product prices also hurt its Epoxy unit.
Segment Review
Chlor Alkali Products and Vinyls: Revenues at the division fell 12.9% year over year to $759.9 million in the reported quarter on lower caustic soda and ethylene dichloride pricing.
Epoxy: Revenues at the division dropped 8.9% year over year to $477.2 million on lower product prices.
Winchester: Revenues rose 19.6% year over year to $188 million on higher commercial and military sales.
Financials
Olin ended the quarter with cash and cash equivalents of $194.5 million, up 84% year over year. Long-term debt was $3,489.5 million at the end of the quarter, up 13.8% year over year.
Outlook
The company expects a sequential improvement in caustic soda pricing and sequentially lower ethylene dichloride pricing in the second quarter.
It anticipates Chlor Alkali Products and Vinyls volumes for the second quarter to decline sequentially on account of weaker customer demand and higher level of maintenance turnaround activities.
For the second quarter, Olin expects the Epoxy business to face weaker product demand from customers of automotive and industrial coatings in Europe and North America.
The company expects the U.S. Army Lake City contract to increase Winchester's annual revenues by $450-$500 million and adjusted EBITDA by $40-$50 million. Moreover, it anticipates commercial ammunition demand to continue to increase in the second quarter.
Also, the company projects planned maintenance turnaround costs of $55 million for the second quarter.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month. The consensus estimate has shifted -93.33% due to these changes.
VGM Scores
At this time, Olin has a poor Growth Score of F, a grade with the same score on the momentum front. Charting a somewhat similar path, 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
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Olin has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Olin (OLN) Down 10.4% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Olin (OLN - Free Report) . Shares have lost about 10.4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Olin 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.
Olin's Earnings Miss, Revenues Beat Estimates in Q1
Olin slipped to a loss of $80 million or 51 cents per share in first-quarter 2020 from a profit of $41.7 million or 25 cents per share a year ago.
The bottom line in the reported quarter was hurt by planned maintenance turnaround costs.
Excluding one-time items, adjusted loss for the quarter was 41 cents per share, which was wider than the Zacks Consensus Estimate of a loss of 27 cents.
The chemical maker’s revenues fell 8.3% year over year to $1,425.1 million in the quarter. However, it topped the Zacks Consensus Estimate of $1,412.4 million.
The company witnessed continued weakness in caustic soda pricing in the quarter. Lower product prices also hurt its Epoxy unit.
Segment Review
Chlor Alkali Products and Vinyls: Revenues at the division fell 12.9% year over year to $759.9 million in the reported quarter on lower caustic soda and ethylene dichloride pricing.
Epoxy: Revenues at the division dropped 8.9% year over year to $477.2 million on lower product prices.
Winchester: Revenues rose 19.6% year over year to $188 million on higher commercial and military sales.
Financials
Olin ended the quarter with cash and cash equivalents of $194.5 million, up 84% year over year. Long-term debt was $3,489.5 million at the end of the quarter, up 13.8% year over year.
Outlook
The company expects a sequential improvement in caustic soda pricing and sequentially lower ethylene dichloride pricing in the second quarter.
It anticipates Chlor Alkali Products and Vinyls volumes for the second quarter to decline sequentially on account of weaker customer demand and higher level of maintenance turnaround activities.
For the second quarter, Olin expects the Epoxy business to face weaker product demand from customers of automotive and industrial coatings in Europe and North America.
The company expects the U.S. Army Lake City contract to increase Winchester's annual revenues by $450-$500 million and adjusted EBITDA by $40-$50 million. Moreover, it anticipates commercial ammunition demand to continue to increase in the second quarter.
Also, the company projects planned maintenance turnaround costs of $55 million for the second quarter.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month. The consensus estimate has shifted -93.33% due to these changes.
VGM Scores
At this time, Olin has a poor Growth Score of F, a grade with the same score on the momentum front. Charting a somewhat similar path, 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
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Olin has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.