Understanding Quaker Chemical (KWR) Reliance on International Revenue

Have you looked into how Quaker Chemical (KWR) performed internationally during the quarter ending March 2024? Considering the widespread global presence of this specialty chemical company, examining the trends in international revenues is essential for assessing its financial resilience and prospects for growth.

The global economy today is deeply interlinked, making a company's engagement with international markets a critical factor in determining its financial success and growth path. It has become essential for investors to comprehend how much a company relies on these foreign markets, as this understanding reveals the firm's potential for consistent earnings, its capacity to harness different economic cycles, and its overall growth prospects.

Being present in international markets serves as a counterbalance to domestic economic challenges while offering chances to engage with more rapidly evolving economies. However, this kind of diversification introduces challenges like currency fluctuations, geopolitical uncertainties and varying market trends.

Upon examining KWR's recent quarterly performance, we noticed several interesting patterns in the revenue generated from its international segments, which are commonly analyzed and observed by Wall Street experts.

The company's total revenue for the quarter amounted to $469.76 million, marking a decrease of 6.1% from the year-ago quarter. We will next turn our attention to dissecting KWR's international revenue to get a clearer picture of how significant its operations are outside its main base.

Unveiling Trends in KWR's International Revenues

Asia/Pacific accounted for 21.6% of the company's total revenue during the quarter, translating to $101.58 million. Revenues from this region represented a surprise of -1.52%, with Wall Street analysts collectively expecting $103.15 million. When compared to the preceding quarter and the same quarter in the previous year, Asia/Pacific contributed $104.8 million (22.4%) and $96.29 million (19.3%) to the total revenue, respectively.

Of the total revenue, $138.42 million came from EMEA during the last fiscal quarter, accounting for 29.5%. This represented a surprise of -8.72% as analysts had expected the region to contribute $151.65 million to the total revenue. In comparison, the region contributed $135.75 million, or 29.1%, and $152.45 million, or 30.5%, to total revenue in the previous and year-ago quarters, respectively.

Projected Revenues in Foreign Markets

Wall Street analysts expect Quaker Chemical to report $494.99 million in total revenue for the current fiscal quarter, indicating a decline of 0.1% from the year-ago quarter. Asia/Pacific and EMEA are expected to contribute 20.6% ($101.85 million) and 29.8% ($147.6 million) to the total revenue, respectively.

For the full year, a total revenue of $1.99 billion is expected for the company, reflecting an increase of 1.9% from the year before. The revenues from Asia/Pacific and EMEA are expected to make up 21.2% and 29.5% of this total, corresponding to $421.55 million and $588.15 million respectively.

Final Thoughts

Relying on global markets for revenues presents both prospects and challenges for Quaker Chemical. Therefore, scrutinizing its international revenue trends is key to effectively forecasting the company's future outlook.

In an era of growing international interdependencies and escalating geopolitical disputes, Wall Street analysts are vigilant in tracking these trends for businesses with a global reach, in order to refine their predictions of earnings. It should be noted, however, that a multitude of other elements, such as a company's domestic position, also play a significant role in shaping the earnings forecasts.

Emphasizing a company's shifting earnings prospects is a key aspect of our approach at Zacks, especially since research has proven its substantial influence on a stock's price in the short run. This correlation is positively aligned, meaning that improved earnings projections tend to boost the stock's price.

Boasting a remarkable track record that's been externally verified, the Zacks Rank, our unique stock rating system, leverages changes in earnings projections to function as a reliable gauge for predicting short-term stock price movements.

Currently, Quaker Chemical holds a Zacks Rank #3 (Hold), signifying its potential to match the overall market's performance in the forthcoming period. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

A Look at Quaker Chemical's Recent Stock Price Performance

Over the past month, the stock has seen a decline of 5.6% in its value, whereas the Zacks S&P 500 composite has posted a decrease of 1.6%. The Zacks Basic Materials sector, Quaker Chemical's industry group, has descended 2.4% over the identical span. In the past three months, there's been a decline of 5.2% in the company's stock price, against a rise of 3.8% in the S&P 500 index. The broader sector has increased by 4.5% during this interval.

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

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