Element Solutions (ESI) Q3 Earnings Beat, Sales Lag Estimates
Element Solutions Inc ESI recorded net loss from continuing operations of $6 million or 2 cents per share in third-quarter 2019 compared with net loss of $4.3 million or 2 cents per share in the year-ago quarter.
Adjusted earnings per share (EPS) of 26 cents surpassed the Zacks Consensus Estimate of 21 cents.
The company generated net sales of $464.7 million, down nearly 5% year over year. The figure lagged the Zacks Consensus Estimate of $478 million. Organic net sales, barring the impact of currency changes and specific pass-through metal prices, fell 2%.
Per management, the downside can be attributed to the slowdown in the automotive market and strengthening of the U.S. dollar.
Adjusted EBITDA was $115 million, up 6% year over year. Adjusted EBITDA rose 9% on a constant currency basis.
Element Solutions Inc Price, Consensus and EPS Surprise
Net sales in the Electronics segment fell 4% year over year to $280 million. Organic net sales dipped 1%. Adjusted EBITDA amounted to $73.6 million, up 14% year over year.
Net sales in the Industrial & Specialty unit fell 6% to $184.7 million. Organic net sales declined 4%. Adjusted EBITDA in the segment was $41.8 million, down 4% year over year.
At the end of the third quarter, Element Solutions had cash and cash equivalents of $200.3 million, down roughly 20.6% year over year. Long-term debt was $1,514.2 million at the end of the reported quarter.
The company now expects adjusted EPS of 84-87 cents per share for 2019, up from 83-86 cents stated earlier. It reaffirmed its adjusted EBITDA growth outlook of 2-5% on a constant currency basis.
The company now expects a 4% organic net sales decline for 2019 compared with a decrease of 1-3% mentioned earlier.
Shares of Element Solutions have gained 3% in a year compared with the industry’s 6.2% growth.
Zacks Rank & Stocks to Consider
Element Solutions currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the basic materials space are Impala Platinum Holdings Ltd. IMPUY, Franco-Nevada Corporation FNV and Agnico Eagle Mines Limited AEM, currently flaunting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Impala Platinum has an expected earnings growth rate of 248.3% for the current fiscal year. The company’s shares have surged 284.7% in the past year.
Franco-Nevada has a projected earnings growth rate of 39.3% for 2019. The company’s shares have rallied 46.6% in a year.
Agnico Eagle has an estimated earnings growth rate of 168.6% for the current year. Its shares have moved up 63.9% in the past year.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.
This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
See their latest picks free >>
Click to get this free report
Franco-Nevada Corporation (FNV): Free Stock Analysis Report
Agnico Eagle Mines Limited (AEM): Free Stock Analysis Report
Impala Platinum Holdings Ltd. (IMPUY): Free Stock Analysis Report
Platform Specialty Products Corporation (ESI): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.