Huntsman (HUN) Q1 Earnings Top, Revenues Trail Estimates

Huntsman Corporation (NYSE:HUN) recorded profits of $119 million or 51 cents per share in first-quarter 2019, down from $274 million or $1.11 in the year-ago quarter.

Barring one-time items, adjusted earnings per share were 46 cents in the quarter, down from 96 cents a year ago. The figure surpassed the Zacks Consensus Estimate of 41 cents.

Revenues were $2,034 million, down around 11% year over year. Also, it missed the Zacks Consensus Estimate of $2,104 million. The company witnessed lower sales across its businesses in the quarter.

Segment Highlights

Polyurethanes: Revenues in the segment fell around 13% year over year to $1,067 million due to lower MDI (methylene diphenyl diisocyanate) and MTBE (methyl tertiary butyl ether) average selling prices, partly offset by higher MDI sales volumes.

Performance Products: Revenues in the unit dropped 10% to $540 million, hurt by lower sales volumes due to weak market conditions and reduced average selling prices.

Advanced Materials: Revenues in the unit decreased around 3% to $272 million due to lower average selling prices.

Textile Effects: Revenues in the division were down roughly 6% to $189 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 $444 million at the end of the quarter, down 2% year over year. Long-term debt was $2,323 million, up around 1% year over year. Net cash used in operating activities was $31 million for the quarter compared with net cash provided by operating activities of $111 million a year ago.

The company repurchased around 1.5 million shares worth roughly $34 million in the quarter.

Outlook

Going forward, Huntsman said that it will continue to execute its strategy to expand its downstream businesses through strategic investments, new products and continued globalization of recent bolt-on acquisitions. The company will also continue its balanced approach to capital allocation including share buybacks.

Price Performance

Huntsman's shares have lost around 26.6% in the past year compared with the industry’s 24.1% decline.

Zacks Rank and Stocks to Consider

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

Better-ranked stocks in the basic materials space include Sandstorm Gold Ltd. (NYSE:SAND) , Flexible Solutions International Inc. (NYSE:FSI) and Israel Chemicals Ltd. (NYSE:ICL) .

Sandstorm Gold has an expected earnings growth rate of 200% for the current year and carries a Zacks Rank #1 (Strong Buy). The company’s shares have gained around 9% over 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 171.4% for the current year and carries a Zacks Rank #2 (Buy). Its shares have rallied roughly 108% in the past year.

Israel Chemicals has an expected earnings growth rate of 13.5% for the current year and carries a Zacks Rank #2. Its shares have gained around 14% in the past year.

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