Ashland's (ASH) Q4 Earnings Miss Estimates, Revenues Meet
Ashland Global Holdings Inc. ASH recorded fourth-quarter fiscal 2023 (ending Sep 30, 2023) adjusted earnings of 41 cents per share, down from $1.46 in the prior-year quarter. The bottom line missed the Zacks Consensus Estimate of 47 cents.
Sales were down 17.9% year over year to $518 million. The top line matched the Zacks Consensus Estimate. Sales were adversely impacted by lower volumes from customer inventory destocking, partly offset by favorable pricing.
Ashland Inc. Price, Consensus and EPS Surprise
Ashland Inc. price-consensus-eps-surprise-chart | Ashland Inc. Quote
Segment Highlights
Life Sciences: Sales in the segment fell 5% from the prior year to $203 million in the reported quarter, missing Zacks Consensus Estimate of $207 million. The decline is due to weak sales to nutrition customers due to persistent customer destocking. The segment witnessed destocking in most end markets.
Personal Care: Sales in the division fell 22% year over year to $146 million, missing Zacks Consensus Estimate of $150 million. Continuous inventory destocking by customers across end markets more than offset disciplined pricing.
Specialty Additives: Sales in the segment fell 23% year over year to $144 million, missing the Zacks Consensus Estimate of $150 million. Sales were hurt by the customer inventory destocking across end markets.
Intermediates: Sales in the segment went down 42% year over year to $37 million, missing the Zacks Consensus Estimate of $40.36 million. This was affected by lower pricing and volumes of captive and merchant sales.
Balance Sheet
Operating activities generated $294 million in cash flows in fiscal 2023 compared with $193 million a year ago. Ongoing free cash flow was $217 million in the fiscal year, up from $127 million in fiscal 2022.
FY2023 Results
Sales in fiscal 2023 were $2.2 billion, an 8% decrease from the previous year. Sustained pricing and continued demand for pharmaceutical products were more than offset by persistent customer inventory destocking across the majority of other end markets since the beginning of the fiscal year.
Net income was $178 million in the fiscal year, falling from $927 million the previous year. Adjusted EBITDA was $459 million, down 22%.
Outlook
Ashland expects adjusted EBITDA for the first quarter of fiscal 2024 to be in the range of $55 million to $65 million. It anticipates sales for the first quarter to be in the band of $470 million to $490 million.
Price Performance
Shares of Ashland have lost 29.4% in the past year against a 3.8% rise of the industry.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
Ashland currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the basic materials space include Carpenter Technology Corporation CRS, Axalta Coating Systems Ltd. AXTA and The Andersons Inc. ANDE.
Carpenter Technology has a projected earnings growth rate of 213.2% for the current fiscal year. It currently carries a Zacks Rank #1 (Strong Buy). CRS delivered a trailing four-quarter earnings surprise of roughly 14.3%, on average. The stock is up around 69.5 % in a year. You can see the complete list of today’s Zacks #1 Rank stocks here.
Axalta has a projected earnings growth rate of 5.4% for the current year. It currently carries a Zacks Rank #2 (Buy). AXTA delivered a trailing four-quarter earnings surprise of roughly 6.7%, on average. The stock is up around 21.8% in a year.
Andersons currently carries a Zacks Rank #2. The stock has gained roughly 30.5% in the past year. ANDE beat the Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 64.4%, on average.
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