Why Is Huntsman (HUN) Up 10.4% Since Last Earnings Report?
A month has gone by since the last earnings report for Huntsman (HUN). Shares have added about 10.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Huntsman due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Huntsman’s Earnings and Revenues Beat Estimates in Q2
Huntsman 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.
Polyurethanes: Revenues for the segment fell 28% year over year to $730 million in the reported quarter due to lower MDI 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.
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.
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.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. The consensus estimate has shifted 134.27% due to these changes.
Currently, Huntsman has a subpar Growth Score of D, however its Momentum Score is doing a lot better with an A. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Huntsman has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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