Huntsman’s (HUN) Earnings and Revenues Top Estimates in Q2

Huntsman Corporation HUN logged a profit of $623 million or $1.71 per share in second-quarter 2018, a more than three-fold surge from $183 million or 69 cents recorded a year ago.

Barring one-time items, adjusted earnings were $1.01 per share for the quarter, which topped the Zacks Consensus Estimate of 87 cents.

Huntsman reported revenues of $2,404 million, up around 17% year over year. The figure also beat the Zacks Consensus Estimate of $2,276 million. The results were driven by strong performance across the company's businesses.

Segment Highlights

Polyurethanes: Revenues for the segment jumped around 28% year over year to $1,313 million on the back of higher average selling price and sales volumes.

Performance Products: Revenues for the unit went up 6% to $593 million, driven by higher selling prices.

Advanced Materials: Revenues for the unit increased around 12% to $292 million on the back of higher average selling prices and volumes.

Textile Effects: Revenues for the division went up around 11% to $227 million on the back of volume growth and higher selling prices.

Financials

Huntsman generated free cash flow of $174 million during the quarter, up 13% year over year. Huntsman had $409 million of cash at the end of the quarter, down 21% year over year. Long-term debt was $2,311 million, down 43% year over year.

The company repurchased around 4.6 million shares worth roughly $138 million during the quarter.

Outlook

Huntsman stated that growth in its Polyurethanes business continues on the back of good supply and demand fundamentals. The company remains committed to execute opportunities in its downstream businesses while creating shareholder value.

The company also expects to spend around $325 million on capital expenditures this year. It also expects adjusted effective tax rate for 2018 to be roughly 20-22%.

Price Performance

Huntsman's shares have rallied 27.2% over the past year, outperforming the 6.5% growth of the industry it belongs to.

Zacks Rank & Stocks to Consider

Huntsman currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks worth considering in the basic materials space include KMG Chemicals, Inc. KMG, Ingevity Corporation NGVT and Celanese Corporation CE each carrying a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

KMG Chemicals has an expected long-term earnings growth rate of 28.5%. Its shares have gained roughly 42% over a year.

Ingevity has an expected long-term earnings growth rate of 12%. The company’s shares have rallied around 69% in a year.

Celanese has an expected long-term earnings growth rate of 10%. Its shares have shot up roughly 23% over a year.

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