Ingevity's (NGVT) Earnings Top Estimates In Q3, Sales Miss

Ingevity Corporation (NYSE:NGVT) logged profits (attributable to stockholders) of $59.9 million or $1.41 per share in third-quarter 2019, up around 16% from $51.7 million or $1.16 a year ago.

Adjusted earnings per share for the reported quarter were $1.46, surpassing the Zacks Consensus Estimate of $1.42.

The company’s revenues rose roughly 16% year over year to $359.9 million in the quarter, but lagged the Zacks Consensus Estimate of $365.3 million.

Adjusted EBITDA climbed roughly 26% year over year to $114 million in the quarter. While the chemical maker faced challenges from weak market fundamentals in the quarter, it gained from its acquisition of the Capa caprolactone business.

Ingevity Corporation Price, Consensus and EPS Surprise

Ingevity Corporation Price, Consensus and EPS Surprise

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

Segment Review

Revenues from the Performance Chemicals division rose around 7% year over year to $229.7 million in the quarter. Revenues were driven by the addition of the engineered polymers product line through the Capa caprolactone acquisition.

Revenues from the Performance Materials unit climbed around 35% to $130.2 million, driven by strong sales to automotive customers in China. The growth was also supported by strong growth in sales of the company’s solutions geared to meet the U.S. and Canadian automotive emission regulations.

Balance Sheet

Ingevity ended the quarter with cash and cash equivalents of $75.6 million, up around 31% year over year. Long-term debt was $1,294.4 million, up around 74%.

Outlook

Ingevity revised its sales guidance for 2019 to between $1.28 billion and $1.30 billion from its earlier expectation of $1.30 billion and $1.36 billion. It also revised its adjusted EBITDA guidance for the year to the band of $390-$400 million from its prior view of $390-$410 million.

Price Performance

Shares of Ingevity have lost 1.2% year to date, underperforming the industry’s 14.6% rise.

Zacks Rank & Key Picks

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

Better-ranked stocks worth a look in the basic materials space include Agnico Eagle Mines Limited (NYSE:AEM) , Kinross Gold Corporation (NYSE:KGC) and Franco-Nevada Corporation (TSX:FNV) , all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Agnico Eagle has a projected earnings growth rate of 158.6% for the current year. The company’s shares have rallied 53% in a year’s time.

Kinross has projected earnings growth rate of 170% for the current year. The company’s shares have surged around 77% in a year’s time.

Franco-Nevada has estimated earnings growth rate of 35.9% for the current year. The company’s shares have gained roughly 54% in a year’s time.

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 >>