Markets

Innospec (IOSP) Q2 Earnings Top Estimates, Sales Up Y/Y

Innospec Inc.IOSP posted a profit of $26.1 million or $1.06 per share in second-quarter 2017, down around 10% from $28.9 million or $1.18 per share a year ago.

Barring one-time items, earnings were $1.16 per share for the quarter, coming ahead of the Zacks Consensus Estimate of $1.08.

The chemical maker's revenues soared 43% year over year to $326.3 million in the quarter. The top line was driven by strong sales gains across Performance Chemicals and Oilfield Services units.

Innospec Inc. Price, Consensus and EPS Surprise

Innospec Inc. Price, Consensus and EPS Surprise | Innospec Inc. Quote

Segment Highlights

Revenues from the Fuel Specialties segment went down 6% year over year to $121.3 million in the quarter as favorable price and mix was more than offset by lower volumes and negative currency impact. Operating income fell 2% to $23.8 million in the quarter.

The Performance Chemicals unit raked in sales of $104.9 million in the quarter, a nearly three-fold year over year jump, driven by business acquired from Huntsman. Operating income climbed 38% to $6.5 million.

Revenues from the Oilfield Services division surged 64% to $76.1 million, buoyed by increased customer activity, higher volumes and favorable price and mix impact. The segment recorded an operating income of $3.7 million in the quarter compared with a loss of $1.6 million a year ago. The division is benefiting from improved market conditions.

Revenues from the Octane Additives unit climbed roughly 42% year over year to $24 million. Operating income went up around 33% to $12.8 million.

Balance Sheet

Innospec ended the quarter with cash and cash equivalents of $48.8 million, down around 68% year over year. Total debt was $254.9 million, up around 61% year over year. Net cash from operations was $9 million in the quarter versus $50.4 million a year ago.

Outlook

Innospec said that it is optimistic about meeting its expectations for 2017. The company also noted that new products will help it deliver sustainable growth in the longer term while its balanced capital management program should enable it create shareholder value moving ahead. Innospec also remains open to more acquisition opportunities. The company also sees healthy prospects for Oilfield Services for the balance of 2017.

Price Performance

Shares of Innospec have gained a paltry 0.4% over a year, underperforming the industry 's 18.4% rally.

Zacks Rank & Key Picks

Innospec is a Zacks Rank #3 (Hold) stock.

Better-placed companies in the chemicals space include The Chemours Company CC , Kronos Worldwide, Inc. KRO and BASF SE BASFY , all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.

Chemours has an expected long-term earnings growth of 15.5%.

Kronos has an expected long-term earnings growth of 5%.

BASF has an expected long-term earnings growth of 8.6%.

One Simple Trading Idea

Since 1988, the Zacks system has more than doubled the S&P 500 with an average gain of +25% per year. With compounding, rebalancing, and exclusive of fees, it can turn thousands into millions of dollars.

This proven stock-picking system is grounded on a single big idea that can be fortune shaping and life changing. You can apply it to your portfolio starting today.

Learn more >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

BASF SE (BASFY): Free Stock Analysis Report

Kronos Worldwide Inc (KRO): Free Stock Analysis Report

Chemours Company (The) (CC): Free Stock Analysis Report

Innospec Inc. (IOSP): 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.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

BASFY KRO IOSP CC

Other Topics

Earnings Stocks

Latest Markets Videos

Zacks

Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

Learn More