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Ashland's (ASH) Earnings and Sales Surpass Estimates in Q4

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Zacks Equity Research
·4 min read
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Ashland Global Holdings Inc. ASH logged profit of $5 million or 7 cents per share in the fourth quarter of fiscal 2020 (ended Sep 30, 2020), down from a profit of $411 million or $6.71 per share in the prior-year quarter.

Barring one-time items, adjusted earnings came in at 99 cents per share, up from 77 cents in the year-ago quarter. It topped the Zacks Consensus Estimate of 79 cents per share.

Sales were flat year over year at $609 million, surpassing the Zacks Consensus Estimate of $585.5 million. Sales rose 6% on a sequential comparison basis on the back of strength in the Consumer Specialties segment and improved demand within the Industrial Specialties division. The company saw strong demand in its Life Sciences and Personal Care & Household business units in the quarter.

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

 

FY20 Results

The company recorded a loss of $508 million of $8.39 per share for fiscal 2020 compared with a profit of $505 million or $8.03 per share a year ago. Sales for the fiscal decreased roughly 7% year over year to $2,326 million.

Segment Highlights

Consumer Specialties: Sales in the segment rose 4% year over year to $344 million in the reported quarter. The company saw strength across pharmaceutical excipients, biofunctional ingredients and additives for hand sanitizers. Its nutraceuticals business also returned to growth in the quarter.

Industrial Specialties: Sales in the division slipped 3% year over year to $240 million, hurt by reduced industrial demand due to the coronavirus pandemic.

Intermediates & Solvents: Sales in the segment dropped 33% year over year to $28 million, impacted by reduced merchant and captive volumes.

Financials

The company ended fiscal 2020 with cash and cash equivalents of $454 million, a roughly 96% increase year over year. Long-term debt was $1,573 million at the end of the quarter, up around 5% year over year.

Cash provided by operating activities was $160 million in the reported quarter, up from $135 million in the prior-year quarter. Free cash flow was $116 million for the quarter, up from $83 million in the year-ago quarter.

Outlook

Ashland said that its continued self-help actions will position it well for the upcoming fiscal year and beyond. The company’s priorities for fiscal 2021 include driving margin expansion, boosting free cash flows, improving mix from innovation, focusing on more profitable strategic segments, driving productivity and accelerating profitable growth. The company also expects continued recovery in global demand in fiscal 2021.

Price Performance

Shares of the company declined 2.4% in the past year against the industry’s 2.7% growth.

 

 

Zacks Rank & Key Picks

Ashland currently carries a Zacks Rank #2 (Buy).

Other top-ranked stocks worth considering in the basic materials space include Agnico Eagle Mines Limited AEM, Barrick Gold Corporation GOLD and AngloGold Ashanti Limited AU.

Agnico Eagle has a projected earnings growth rate of 103.1% for the current year. The company’s shares have gained around 26% in a year. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Barrick Gold has an expected earnings growth rate of 111.8% for the current year. The company’s shares have surged around 57% in the past year. It currently carries a Zacks Rank #2.

AngloGold has a projected earnings growth rate of 150.6% for the current year. The company’s shares have gained roughly 23% in a year. It currently carries a Zacks Rank #2.

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