Element Solutions Inc (NYSE:ESI) recorded net loss from continuing operations of $6 million or 2 cents per share in third-quarter 2019 compared with net loss of $4.3 million or 2 cents per share in the year-ago quarter.
Adjusted earnings per share (EPS) of 26 cents surpassed the Zacks Consensus Estimate of 21 cents.
The company generated net sales of $464.7 million, down nearly 5% year over year. The figure lagged the Zacks Consensus Estimate of $478 million. Organic net sales, barring the impact of currency changes and specific pass-through metal prices, fell 2%.
Per management, the downside can be attributed to the slowdown in the automotive market and strengthening of the U.S. dollar.
Adjusted EBITDA was $115 million, up 6% year over year. Adjusted EBITDA rose 9% on a constant currency basis.
Element Solutions Inc Price, Consensus and EPS Surprise
Segment Highlights
Net sales in the Electronics segment fell 4% year over year to $280 million. Organic net sales dipped 1%. Adjusted EBITDA amounted to $73.6 million, up 14% year over year.
Net sales in the Industrial & Specialty unit fell 6% to $184.7 million. Organic net sales declined 4%. Adjusted EBITDA in the segment was $41.8 million, down 4% year over year.
Financial Position
At the end of the third quarter, Element Solutions had cash and cash equivalents of $200.3 million, down roughly 20.6% year over year. Long-term debt was $1,514.2 million at the end of the reported quarter.
Outlook
The company now expects adjusted EPS of 84-87 cents per share for 2019, up from 83-86 cents stated earlier. It reaffirmed its adjusted EBITDA growth outlook of 2-5% on a constant currency basis.
The company now expects a 4% organic net sales decline for 2019 compared with a decrease of 1-3% mentioned earlier.
Price Performance
Shares of Element Solutions have gained 3% in a year compared with the industry’s 6.2% growth.
Zacks Rank & Stocks to Consider
Element Solutions currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the basic materials space are Impala Platinum Holdings Ltd. (OTC:IMPUY) , Franco-Nevada Corporation (TSX:FNV) and Agnico Eagle Mines Limited (NYSE:AEM) , currently flaunting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Impala Platinum has an expected earnings growth rate of 248.3% for the current fiscal year. The company’s shares have surged 284.7% in the past year.
Franco-Nevada has a projected earnings growth rate of 39.3% for 2019. The company’s shares have rallied 46.6% in a year.
Agnico Eagle has an estimated earnings growth rate of 168.6% for the current year. Its shares have moved up 63.9% in the past year.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.
This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
See their latest picks free >>
Franco-Nevada Corporation (FNV): Free Stock Analysis Report
Agnico Eagle Mines Limited (AEM): Free Stock Analysis Report
Impala Platinum Holdings Ltd. (IMPUY): Free Stock Analysis Report
Platform Specialty Products Corporation (ESI): Free Stock Analysis Report
Original post
Zacks Investment Research