Axalta's (AXTA) Earnings In Line, Revenues Beat Estimates in Q4
Axalta Coating Systems Ltd. AXTA posted earnings (as reported) of 33 cents per share in fourth-quarter 2023 compared with 20 cents in the year-ago quarter.
Barring one-time items, earnings were 43 cents per share in the reported quarter, up 13% year over year. It was in line with the Zacks Consensus Estimate.
The company’s revenues rose around 5% year over year to $1,297.3 million in the quarter. The top line beat the Zacks Consensus Estimate of $1,282.5 million.
The company benefited from higher price and mix as well as improved volumes. It saw higher sales across both the Performance Coatings and Mobility Coatings units.
Axalta Coating Systems Ltd. Price, Consensus and EPS Surprise
Axalta Coating Systems Ltd. price-consensus-eps-surprise-chart | Axalta Coating Systems Ltd. Quote
Segment Review
Sales from the Performance Coatings unit rose around 4% year-over-year to $849 million in the reported quarter, aided by price and product mix benefit. It was higher than the consensus estimate of $844 million. Refinish volumes rose slightly year-over-year while industrial volumes were lower as stable volumes in Europe were more than offset by weak macroeconomic conditions in North America, notably in construction markets.
The Mobility Coatings unit recorded sales of $449 million in the fourth quarter, up around 7% year over year, driven by strong volumes. It was higher than the consensus estimate of $439 million. Volumes rose in all regions in the quarter. Light vehicle volume growth surpassed global auto production, particularly in China.
FY23 Results
Earnings for full-year 2023 were $1.21 per share compared with 86 cents per share a year ago. Net sales went up around 6% year over year to $5.2 billion.
Financials
Axalta ended 2023 with cash and cash equivalents of $699.8 million, up around 8% year over year. Long-term debt was $3,478.5 million at the end of the year, down roughly 5% year over year.
The company generated cash flow from operations of $286 million in the reported quarter, compared with $246 million in the prior-year quarter.
Outlook
The company expects adjusted earnings per share of roughly 40 cents for the first quarter of 2024. It also sees net sales to be flat year-over-year in the quarter. Adjusted EBITDA is forecast to be around $240 million.
For full-year 2024, Axalta envisions adjusted earnings in the band of $1.80-$1.95 per share. Adjusted EBITDA is predicted to be in the range of $1,010-$1,050 million.
Price Performance
Shares of Axalta have gained 7% in a year, compared with the industry’s rise of 17.9%.
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Zacks Rank & Key Picks
AXTA currently has a Zacks Rank #3 (Hold).
Better-ranked stocks worth a look in the basic materials space include, Cameco Corporation CCJ, Carpenter Technology Corporation CRS and Alpha Metallurgical Resources Inc. AMR.
Cameco has a projected earnings growth rate of 326.3% for the current year. The Zacks Consensus Estimate for CCJ’s current-year earnings has been revised upward by 31.4% over the past 60 days. The stock has shot up around 50% in a year. CCJ currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for Carpenter Technology’s current fiscal year earnings is pegged at $4.00, indicating a year-over-year surge of 250.9%. CRS, carrying a Zacks Rank #1, beat the Zacks Consensus Estimate in three of the last four quarters while matching it once, with the average earnings surprise being 12.2%. The company’s shares have gained 26% in the past year.
The Zacks Consensus Estimate for Alpha Metallurgical Resources’ current-year earnings has been revised upward by 8.8% in the past 60 days. It currently carries a Zacks Rank #1. AMR delivered a trailing four-quarter earnings surprise of roughly 9.6%, on average. AMR shares are up around 125% in a year.
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