Element Solutions Inc. ESI recorded earnings (as reported) of 22 cents per share in third-quarter 2022 compared with 15 cents in the year-ago quarter.
Adjusted earnings per share came in at 36 cents in the quarter, which missed the Zacks Consensus Estimate of 37 cents.
The company generated net sales of $618.5 million, roughly flat year over year. The figure missed the Zacks Consensus Estimate of $660.7 million. Organic net sales rose 5%. The company faced headwinds from the weakening of the electronics market, lack of demand recovery in Europe and raw material and logistics cost inflation in the reported quarter.
Element Solutions Inc. Price, Consensus and EPS Surprise
Element Solutions Inc. price-consensus-eps-surprise-chart | Element Solutions Inc. Quote
Net sales in the Electronics segment fell 6% year over year to $388 million in the reported quarter. Organic net sales were up 5% from the year-ago quarter’s reported figure.
Net sales in the Industrial & Specialty unit rose 13% year over year to $231 million. Organic net sales moved up 6% year over year.
Element Solutions ended the quarter with cash and cash equivalents of $234 million, down around 16% year over year. Long-term debt was $1,886.8 million at the end of the quarter, down roughly 0.6% year over year.
Cash from operating activities was $127 million for the quarter. Free cash flow was $116 million in the reported quarter.
The company repurchased 3 million shares of its common stock during the third quarter.
The company updated its guidance for adjusted EBITDA for 2022 to a range of $525-$530 million factoring in incremental currency headwinds and reduced macroeconomic growth assumptions. It now sees full-year adjusted earnings per share in the range of $1.40-$1.42. ESI anticipates generating free cash flow of $250 million for 2022.
The company also forecasts fourth-quarter 2022 adjusted EBITDA to be roughly flat year over year on a constant currency basis.
Shares of Element Solutions have lost 21.4% in a year against a 28.3% decline of the industry.
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Zacks Rank & Other Key Picks
Element Solutions currently carries a Zacks Rank #5 (Strong Sell).
Better-ranked stocks worth considering in the basic materials space include Albemarle Corporation ALB, Sociedad Quimica y Minera de Chile S.A. SQM and Ryerson Holding Corporation RYI.
Albemarle, currently sporting a Zacks Rank #1 (Strong Buy), has a projected earnings growth rate of 430.7% for the current year. The Zacks Consensus Estimate for ALB’s current-year earnings has been revised 5.8% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Albemarle’s earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 24.2%, on average. ALB has gained around 15% in a year.
Sociedad has a projected earnings growth rate of 530.7% for the current year. The Zacks Consensus Estimate for SQM’s current-year earnings has been revised 2.1% upward in the past 60 days.
Sociedad has a trailing four-quarter earnings surprise of roughly 27.2%. SQM has rallied roughly 80% in a year. The company currently carries a Zacks Rank #1.
Ryerson Holding, currently carrying a Zacks Rank #1, has an expected earnings growth rate of 74.2% for the current year. The consensus estimate for RYI’s earnings for the current year has been revised 3.2% upward in the past 60 days.
Ryerson Holding’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 28.9%. RYI has gained around 35% over a year.
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