Element Solutions Inc ESI recorded earnings from continuing operations of 29 cents per share in fourth-quarter 2019, compared with a loss of 5 cents per share in the year-ago quarter.
Adjusted earnings per share (EPS) of 22 cents for the quarter surpassed the Zacks Consensus Estimate of 20 cents.
The company generated net sales of $454.7 million, down roughly 5% year over year. The figure, however, topped the Zacks Consensus Estimate of $445 million. Organic net sales, barring the impact of currency changes, specific pass-through metal prices and acquisitions, fell 4%.
The company saw continued weakness in its industrial markets in the reported quarter. However, it gained from stability in Asian electronics and cost control actions.
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 4% year over year to $272 million in the reported quarter. Organic net sales dipped 4%. Adjusted EBITDA was $63 million, up 7% year over year.
Net sales in the Industrial & Specialty unit fell 7% to $183 million. Organic net sales declined 6%. Adjusted EBITDA in the segment was $40 million, down 2% year over year.
Earnings (as reported) from continuing operations for 2019 were 30 cents per share, compared with a loss of 27 cents per share a year ago. Adjusted earnings were 88 cents per share, up from 17 cents in 2018.
Revenues were $1,835.9 million for the full year, down around 6% year over year.
Element Solutions ended 2019 with cash and cash equivalents of $190.1 million, down roughly 19% year over year. Long-term debt was $1,513.2 million at the end of the year, down around 72% year over year.
The company generated cash flows from operating activities of $171 million in 2019. Adjusted free cash flows for the year was $238 million.
The company expects adjusted EPS of 93-97 cents for 2020. It also sees adjusted EBITDA growth of 2-4% on a constant currency basis.
Moreover, the company expects a roughly 1% year-over-year growth in organic net sales for 2020.
Shares of Element Solutions are down 8.3% in a year compared with the industry’s 2.9% decline.
Zacks Rank & Stocks to Consider
Element Solutions currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the basic materials space include Daqo New Energy Corp. DQ, NovaGold Resources Inc. NG and Commercial Metals Company CMC.
Daqo New Energy has projected earnings growth rate of 353.7% for 2020 and sports a Zacks Rank #1 (Strong Buy). The company’s shares have rallied roughly 96% in a year’s time. You can see the complete list of today’s Zacks #1 Rank stocks here.
NovaGold has projected earnings growth rate of 11.1% for the current fiscal and carries a Zacks Rank #2 (Buy). The company’s shares have surged around 136% over a year.
Commercial Metals has estimated earnings growth rate of 20.7% for the current fiscal and carries a Zacks Rank #2. The company’s shares have shot up roughly 17% in a year’s time.
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