Element Solutions (ESI) Q4 Earnings Meet, Sales Lag Estimates
Zacks Investment Research | Mar 01, 2019 06:47AM ET
Element Solutions Inc (NYSE:ESI) recorded net loss from continuing operations (as reported) of $14.2 million or 5 cents per share in fourth-quarter 2018, narrower than a loss of around $18.8 million or 6 cents a year ago.
Adjusted earnings for the reported quarter were 2 cents per share, in line with the Zacks Consensus Estimate.
The specialty chemicals company raked in net sales of $478 million for the quarter, down roughly 2% year over year. It also lagged the Zacks Consensus Estimate of $480 million. Organic net sales, barring the impact of currency changes, specific pass-through metal prices and acquisitions, rose 1%.
Adjusted EBITDA for the reported quarter came in at $99 million, down 5% year over year. Adjusted EBITDA fell 1% on a constant currency basis.
FY18 Results
For 2018, net loss from continuing operations (as reported) was $77 million or 27 cents per share, lower than net loss $191.8 million or 68 cents per share recorded in 2017.
Net sales for the year rose roughly 4% year over year to $1,961 million. Organic net sales went up 3%. The company achieved organic growth notwithstanding a difficult macro environment.
Segment Highlights
Net sales from the Electronics segment fell 4% year over year to $282.1 million. Organic net sales dipped 1%. Adjusted EBITDA for the division was $58.3 million, down 8%.
Net sales from the Industrial & Specialty unit rose 1% to $196.3 million. Organic net sales rose 4%. Adjusted EBITDA for the segment was $40.6 million, up 1%.
Financial Position
Element Solutions exited 2018 with cash and cash equivalents of $233.6 million, down roughly 10% year over year. Long-term debt at the end of the year was $5,350.7 million, down around 2%.
Outlook
The company reiterated its earlier guidance for 2019. It expects organic net sales growth of 1-3% and adjusted EBITDA growth (in constant currency) of 5-8% for 2019. The company expects foreign exchange headwinds of roughly 2% to net sales and around $15 million to adjusted EBITDA factoring in end-2018 exchange rates.
Element Solutions also expects adjusted earnings for the year to be 82-87 cents per share, including the impact of lower share count as a result of its repurchase of 37 million shares on Feb 8, 2019.
Zacks Rank & Stocks to Consider
Element Solutions currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks worth considering in the basic materials space include Kirkland Lake Gold Ltd. (TO:KL) , Israel Chemicals Ltd. (NYSE:ICL) and Franco-Nevada Corporation (TO:FNV) .
Kirkland Lake Gold has an expected earnings growth rate of 8.8% for the current year and carries a Zacks Rank #1 (Strong Buy). Its shares have shot up around 128% in the past year. You can see Zacks Investment Research
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.