Ashland’s (ASH) Earnings and Revenues Miss Estimates in Q1

Ashland Global Holdings Inc. ASH missed earnings and sales estimates in the first quarter of fiscal 2018 (ended Dec 31, 2017). The company reported net loss from continuing operations of $7 million or 12 cents per share in the quarter as compared with the net loss of $65 million or $1.05 recorded in the prior-year quarter.

Barring one-time items, adjusted earnings for the first quarter came in at 46 cents per share, which missed the Zacks Consensus Estimate of 47 cents.

Revenues increased roughly 19.6% year over year to $842 million. The figure however, trailed the Zacks Consensus Estimate of $860 million.

Segment Highlights

Specialty Ingredients: Sales for the Specialty Ingredients segment for the first quarter rose 14% year over year to $550 million on the back of strong product mix across key end markets and contribution from Pharmachem.

Composites: Sales for the Composites segment for the quarter jumped 32% year over year to $218 million owing to strong organic growth from continued pricing discipline along with business growth in North America and Europe.

Intermediates & Solvents: Sales for the Intermediates & Solvents segment increased 30% year over year to $74 million driven by favorable costs, continued healthy market demand and strong pricing.

Financials

Cash used by operating activities from continuing operations fell 60% year over year to $24 million in the first quarter. The company’s long-term debt was roughly $2,584 million compared with $2,825 million a year ago.

Outlook

Ashland updated its adjusted earnings outlook to a range of $2.90-$3.10 per share for fiscal 2018 due to changes in the company’s effective tax rate for the fiscal. The company expects to generate more than $220 million in free cash flow in fiscal 2018.

Ashland expects adjusted earnings for the second quarter of fiscal 2018 in the range of 80-90 cents per share as compared to 70 cents in the prior-year period.

Price Performance

Shares of Ashland have moved up 5.9% in the last three months, outperforming the industry’s 0.4% upside.

Zacks Rank & Stocks to Consider

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

Some better-ranked stocks in the basic materials space are ArcelorMittal MT, Steel Dynamics, Inc. STLD and Huntsman Corporation HUN, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

ArcelorMittal has an expected long-term earnings growth rate of 13.4%. Its shares have rallied 54.5% over a year.

Steel Dynamics has an expected long-term earnings growth rate of 12%. Its shares have soared 39.7% in a year’s time.

Huntsman has an expected long-term earnings growth rate of 8.3%. Its shares surged 63% over a year.

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