Univar Inc. UNVR logged a profit (on a reported basis) of $56.1 million or 40 cents per share in second-quarter 2018, compared with net income of $31.3 million or 22 cents a year ago.
Barring one-time items, earnings came in at 47 cents per share in the quarter, missing the Zacks Consensus Estimate by a penny.
The chemical maker’s revenues rose 5.6% year over year to $2,372.6 million in the quarter, beating the Zacks Consensus Estimate of $2,343 million.
Gross profit rose around 7.3% year over year to $500.5 million in the quarter. Adjusted EBITDA margin expanded 20 basis points to 7.3%.
Univar Inc. Price, Consensus and EPS Surprise
Segment Review
Revenues at the USA division increased 10% year over year to $1.3 billion in the reported quarter. Gross profit rose 5.5% year over year to $290.8 million.
Revenues at the Canada segment declined around 8.4% year over year to $450.9 million. Gross profit rose 2.1% year over year to $68.9 million in the quarter.
The EMEA segment raked in sales of $511.9 million, up 10.4% year over year. Gross profit rose around 12.9% year over year to $118.2 million.
Sales from the Rest of World unit inched up 0.2% to $100 million. Gross profit grew 22.2% year over year to $22.6 million.
Balance Sheet
Univar ended the quarter with cash and cash equivalents of $128.6 million, down around 60% year over year. Long-term debt totaled $2,590.1 million, down around 10.5% year over year.
Outlook
For 2018, Univar continues to expect adjusted EBITDA growth of low-double digits. Adjusted earnings per share for the year are projected in the range of $1.65-$1.85.
Moreover, the company expects low double-digit growth in adjusted EBITDA for the third quarter.
Price Performance
Univar has underperformed the industry over the past six months. The company’s shares have lost 6.2% over this period against the industry’s 0.8% rise.
Zacks Rank & Stocks to Consider
Univar carries a Zacks Rank #4 (Sell).
A few better-ranked stocks in the basic materials space are Celanese Corporation CE, BHP Billiton Limited BHP and Steel Dynamics Inc. STLD.
Celanese has an expected long-term earnings growth rate of 10% and a Zacks Rank #1 (Strong Buy). The company’s shares have moved up 21.1% in a year. You can see the complete list of today’s Zacks #1 Rank stocks here.
BHP Billiton has an expected long-term earnings growth rate of 5.3%, carrying a Zacks Rank #1. Its shares have rallied roughly 26% in a year’s time.
Steel Dynamics has an expected long-term earnings growth rate of 12% and has a Zacks Rank #2 (Buy). The stock has rallied 31.2% in the past year.
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