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Huntsman (HUN) Earnings and Revenues Beat Estimates in Q2

Huntsman Corporation HUN slipped to a loss of $59 million or 28 cents per share in second-quarter 2020, from a profit of $118 million or 47 cents in the year-ago quarter.

Barring one-time items, adjusted loss per share was 14 cents in the quarter. The figure was narrower than the Zacks Consensus Estimate of a loss of 20 cents.

Revenues were $1,247 million, down around 30% year over year. However, the top line surpassed the Zacks Consensus Estimate of $1,088.8 million. The company saw lower sales across its business segments in the reported quarter.

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 for the segment fell 28% year over year to $730 million in the reported quarter due to lower MDI (methylene diphenyl diisocyanate) average selling prices and overall polyurethanes sales volumes.

Performance Products: Revenues for the unit declined 24% to $228 million due to reduced average selling prices as well as lower sales volumes.

Advanced Materials: Revenues for the unit dropped 30% to $192 million due to lower sales volumes. Average selling prices remain unchanged in the quarter.

Textile Effects: Revenues for the division tumbled 53% to $102 million. The decline was due to reduced sales volumes and sales mix changes.

Financials

Huntsman had total cash of $1,254 million at the end of the quarter, up nearly three fold year over year. Long-term debt was $1,527 million, down around 33% year over year.

Net cash provided by operating activities was $85 million for the reported quarter.

Outlook

Moving ahead, Huntsman said that the global effects of the coronavirus pandemic remain uncertain. The company is seeing improving trends within most of its key markets. Moreover, the integration for recent acquisitions, CVC Thermoset Specialties and Icynene-Lapolla, is ahead of plans and the company expects to achieve total annualized targeted synergies of $35 million for these acquisitions by the end of 2021. Including these synergies related to acquisitions, Huntsman plans to achieve more than $100 million of targeted annualized savings by the end of next year.

Price Performance

Huntsman's shares are down 6.3% in the past year against the industry’s 5.1% decline.

 

 

Zacks Rank & Stocks to Consider

Huntsman currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks worth considering in the basic materials space include Royal Gold, Inc. RGLD, Equinox Gold Corp. EQX and Kinross Gold Corporation KGC.

Royal Gold has a projected earnings growth rate of 62.1% for the current year. The company’s shares have gained around 17% in a year. It currently has a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Equinox Gold has a projected earnings growth rate of 255.2% for the current year. The company’s shares have rallied roughly 101% in a year. It currently carries a Zacks Rank #2 (Buy).

Kinross Gold has an expected earnings growth rate of 85.3% for the current year. The company’s shares have shot up around 106% in the past year. It presently carries a Zacks Rank #2.

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