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Ashland (ASH) Earnings Miss, Sales Meet Estimates in Q3

Zacks Equity Research

Ashland Global Holdings Inc. ASH logged profit from continuing operations of $50 million or 81 cents per share in the third quarter of fiscal 2020 (ended Jun 30, 2020), up from a profit of $23 million or 37 cents per share in the prior-year quarter.

Barring one-time items, adjusted earnings were 84 cents per share, up from 77 cents in the year-ago quarter. It, however, missed the Zacks Consensus Estimate of 85 cents per share.

Sales fell 10% year over year to $574 million, in line with the Zacks Consensus Estimate. Sales were hurt by the effects of the prior year’s business losses and unfavorable foreign currency.

Ashland Global Holdings Inc. Price, Consensus and EPS Surprise

 

Ashland Global Holdings Inc. Price, Consensus and EPS Surprise
Ashland Global Holdings Inc. Price, Consensus and EPS Surprise

Ashland Global Holdings Inc. price-consensus-eps-surprise-chart | Ashland Global Holdings Inc. Quote

Segment Highlights

Consumer Specialties: Sales in the segment fell 1% year over year to $344 million in the reported quarter, impacted by business losses as well as unfavorable currency swings.

Industrial Specialties: Sales in the division slipped 23% year over year to $205 million, hurt by reduced industrial demand and unfavorable currency.

Intermediates & Solvents: Sales in the segment dropped 10% year over year to $37 million, impacted by reduced pricing on intercompany sales of butanediol and merchant-derivative sales.

Financials

The company ended the quarter with cash and cash equivalents of $416 million, a roughly 215% increase year over year. Long-term debt was $1,547 million at the end of the quarter, down 32% year over year.

Cash provided by operating activities from continuing operations was $140 million, up from $87 million in the prior-year quarter.

Outlook

Ashland said that its cost-reduction plans remain on track to generate $40 million of run-rate savings by the end of fiscal 2020. Additionally, the company intends to incur $20-$30 million of the earlier-disclosed reduced fixed-cost absorption associated with inventory-control measures during the fiscal fourth quarter.

Price Performance

Shares of the company have declined 3.4% in the past year against the industry’s 27.5% growth.

 

 

Zacks Rank & Other Stocks to Consider

The company currently flaunts a Zacks Rank #1 (Strong Buy).

Some other top-ranked stocks in the basic materials space are Royal Gold, Inc. RGLD, Equinox Gold Corp. EQX and B2Gold Corp BTG.

Royal Goldhas a projected earnings growth rate of 62.1% for the current year. The company’s shares have gained 17.2% in a year. It currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Equinox Gold has a projected earnings growth rate of 255.2% for the current year. The stock has gained around 101% in a year. It presently has a Zacks Rank of 2 (Buy).

B2Gold has an expected earnings growth rate of 257.1% for 2020. The company’s shares have rallied 104.2% in the past year. It is currently a Zacks #2 Ranked player.

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Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

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Ashland Global Holdings Inc. (ASH) : Free Stock Analysis Report
 
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