Huntsman (HUN) Misses Earnings, Revenue Estimates In Q2

Huntsman Corporation (NYSE:HUN) recorded profits of $118 million or 47 cents per share in second-quarter 2019, down 81% from $623 million or $1.71 in the year-ago quarter.

Barring one-time items, adjusted earnings per share were 63 cents in the quarter, down from $1.01 a year ago. The figure trailed the Zacks Consensus Estimate of 65 cents.

Revenues were $2,194 million, down around 9% year over year. Also, it missed the Zacks Consensus Estimate of $2,287.1 million. The company witnessed lower sales across its businesses in the quarter.

Huntsman Corporation Price, Consensus and EPS Surprise

Huntsman Corporation price-consensus-eps-surprise-chart | Huntsman Corporation Quote

Segment Highlights

Polyurethanes: Revenues in the segment fell around 9% year over year to $1,198 million due to lower MDI (methylene diphenyl diisocyanate) and MTBE (methyl tertiary butyl ether) average selling prices, partly offset by higher MDI and MTBE sales volumes.

Performance Products: Revenues in the unit dropped 9% to $537 million, hurt by reduced average selling prices, partly offset by modestly higher sales volumes.

Advanced Materials: Revenues in the unit decreased around 6% to $275 million due to lower average selling prices and sales volumes.

Textile Effects: Revenues in the division were down roughly 5% to $215 million. Results were impacted by lower sales volumes that more than offset higher average selling prices. Volumes were affected by reduced demand as a result of uncertainties surrounding the U.S.-China trade conflict.

Financials

Huntsman had total cash of $449 million at the end of the quarter, up 10% year over year. Long-term debt was $2,277 million, down around 1% year over year.

Net cash provided by operating activities was $304 million for the quarter compared with net cash provided by operating activities of $228 million a year ago. Huntsman generated free cash flow of $240 million in the quarter, up around 38% year over year.

The company repurchased around 4 million shares worth roughly $81 million in the quarter.

Outlook

Going forward, Huntsman said that it will remain focused on controlling costs, protecting its margins and maintaining a strong balance sheet and cash generation amid economic uncertainties in the second half of 2019. The company will also continue its balanced approach to capital allocation including share buybacks and strategic organic and inorganic growth in its downstream businesses.

Price Performance

Huntsman's shares have gained around 6.5% year to date against the industry’s 19.5% decline.

Zacks Rank and Stocks to Consider

Huntsman currently carries a Zacks Rank #4 (Sell).

A few better-ranked stocks worth considering in the basic materials space include Israel Chemicals Ltd. (NYSE:ICL) , Flexible Solutions International Inc (NYSE:FSI) and Air Products and Chemicals, Inc. (NYSE:APD) .

Israel Chemicals has an expected earnings growth rate of 13.5% for the current year and carries a Zacks Rank #1 (Strong Buy). Its shares are up roughly 5% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.

Flexible Solutions has an expected earnings growth rate of 342.9% for the current fiscal year and carries a Zacks Rank #2 (Buy). Its shares have surged around 98% in the past year.

Air Products has an expected earnings growth rate of 10.6% for the current fiscal year and carries a Zacks Rank #2. The company’s shares have gained around 43% over the past year.

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