Olin Corporation OLN posted a second-quarter 2024 profit of $74.2 million or 62 cents per share, down from $146.9 million or $1.13 per share in the year-ago quarter. Earnings per share missed the Zacks Consensus Estimate of 70 cents.
The chemical maker’s revenues fell roughly 3.5% year over year to $1,644 million in the quarter. It also missed the Zacks Consensus Estimate of $1,712.3 million. The top line in the reported quarter was hurt by lower pricing in its chemical businesses. The company witnessed lower sales across its segments in the quarter.
Olin Corporation Price, Consensus and EPS Surprise
Olin Corporation price-consensus-eps-surprise-chart | Olin Corporation Quote
Segment Review
Chlor Alkali Products and Vinyls: In the second quarter of 2024, revenues amounted to $920.3 million, which fell around 8.2% year over year. The segment’s results were adversely impacted by lower caustic soda pricing. Moreover, the second-quarter 2024 segment sales and results for Chlor Alkali Products and Vinyls were negatively impacted by the maintenance turnaround and subsequent operating issues with the vinyl chloride monomer plant at the Freeport, TX facility, resulting in higher costs and lower profit from lost sales. The reported figure fell short of the consensus estimate of $995.4 million.
Epoxy: Revenues in the division went down around 4.8% year over year to $317.7 million. Sales decreased due to lower product pricing, slightly offset by increased volume. It missed the consensus estimate of $353 million.
Winchester: Revenues rose around 10.7% year over year to $406 million. Sales increased due to higher international military sales, military project revenue and White Flyer sales, slightly offset by decreasing commercial ammunition sales. It missed the consensus estimate of $424 million.
Financials
The cash balance at the end of the second quarter was $182.1 million. In the reported quarter, Olin had roughly $2.7 billion in net debt. In the first half of 2024, net debt increased by $229 million, owing to seasonal working capital.
In the second quarter, the company repurchased roughly 1.9 million shares of common stock for $106 million. Olin had approximately $0.8 billion available for repurchases under the buyback authorization at the end of the quarter.
Outlook
The company reported that the improvement in demand in the Chlor Alkali Products and Vinyls business has been slower than anticipated earlier this year. Olin's second-half 2024 adjusted EBITDA is expected to be flat with the first half, based on OLN’s current expectation and prior to considering the effects of Hurricane Beryl. The company's disciplined capital allocation approach, backed by a strong financial basis and sustained cash flow, will ensure continued shareholder returns.
Price Performance
Shares of Olin have lost 13.8% in the past year against an 11.7% decline of the industry.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
Olin currently carries a Zacks Rank #5 (Strong Sell).
Better-ranked stocks worth a look in the basic materials space include Agnico Eagle Mines AEM, Ero Copper Corp. ERO and Kinross Gold Corporation KGC.
Agnico Eagle is slated to report second-quarter results on Jul 31, after market close. The Zacks Consensus Estimate for AEM’s second-quarter earnings is pegged at 87 cents. AEM beat the consensus in the last four quarters, with the average earnings surprise being 16.5%. It currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Ero Copper is slated to report second-quarter results on Aug 1, after market close. The Zacks Consensus Estimate for ERO’s second-quarter earnings is pegged at 24 cents. ERO currently carries a Zacks Rank #2. It beat the consensus in three of the last four quarters, with the average earnings surprise being 53.9%
Kinross will report results for the second quarter on Jul 31. The Zacks Consensus Estimate for Kinross's second-year earnings is pegged at 13 cents. KGC, a Zacks Rank #2 stock, beat the consensus in the last four quarters, with the average earnings surprise being 46%. The stock has surged nearly 72.9% in the past year.
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