Ingevity (NGVT) Tops Earnings & Revenue Estimates In Q4

Ingevity Corporation (NYSE:NGVT) recorded a profit (attributable to stockholders) of $42.1 million or 99 cents per share in fourth-quarter 2018, compared with $41.6 million or 97 cents a year ago. Adjusted earnings per share for the reported quarter were $1.07, which surpassed the Zacks Consensus Estimate of 78 cents.

The company’s revenues rose roughly 21% year over year to $278.6 million in the quarter, coming ahead of the Zacks Consensus Estimate of $262.4 million.

Adjusted EBITDA climbed roughly 39% year over year to $73.3 million in the quarter. The chemical maker gained from increased volumes, better price and mix, and reduced raw materials costs.

FY18 Results

For 2018, profit was $169.1 million or $3.97 per share, up roughly 34% from $126.5 million or $2.97 per share recorded in 2017.

Net sales for the year went up around 17% year over year to $1,133.6 million, aided by increased selling prices.

Segment Review

Revenues from the Performance Chemicals division jumped around 20% year over year to $166.1 million in the quarter. Revenues were driven by contributions of Georgia-Pacific pine chemicals acquisition and sales growth in oilfield industry on the back of strong U.S. drilling.

Revenues from the Performance Materials unit went up around 24% to $112.5 million. The growth was supported by sustained adoption of the company’s solutions geared to meet the U.S. EPA Tier 3 and California LEV III automotive emission regulations.

Balance Sheet

Ingevity ended 2018 with cash and cash equivalents of $77.5 million, down around 12% year over year. Long-term debt was $741.2 million, up around 67%.

Outlook

Ingevity expects sales of between $1.30 billion and $1.36 billion for 2019. Adjusted EBITDA for the year has been forecast in the band of $390 million to $410 million. The company expects revenues to increase roughly 18% and earnings to rise around 25% year over year at the mid-point of its guidance factoring in its acquisition of the Capa caprolactone business.

Price Performance

Shares of Ingevity have rallied 49.1% over a year, significantly outperforming the industry’s 2.4% rise.

Zacks Rank and Stocks to Consider

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

A few better-ranked stocks worth considering in the basic materials space include Kirkland Lake Gold Ltd. (TO:KL) , The Mosaic Company (NYSE:MOS) and Israel Chemicals Ltd. (NYSE:ICL) .

Kirkland Lake Gold has an expected earnings growth rate of 20.9% for the current year and carries a Zacks Rank #1 (Strong Buy). Its shares have shot up 123% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.

Mosaic has an expected earnings growth rate of 23.5% for the current year and carries a Zacks Rank #2 (Buy). Its shares have gained 26% in the past year.

Israel Chemicals has an expected earnings growth rate of 10.8% for the current year and carries a Zacks Rank #2. The company’s shares have rallied 35% over the past year.

Zacks' Top 10 Stocks for 2019

In addition to the stocks discussed above, wouldn't you like to know about our 10 finest buy-and-holds for the year?

From more than 4,000 companies covered by the Zacks Rank, these 10 were picked by a process that consistently beats the market. Even during 2018 while the market dropped -5.2%, our Top 10s were up well into double-digits. And during bullish 2012 – 2017, they soared far above the market's +126.3%, reaching +181.9%.

This year, the portfolio features a player that thrives on volatility, an AI comer, and a dynamic tech company that helps doctors deliver better patient outcomes at lower costs.

See Stocks Today >>