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Huntsman's (HUN) Earnings and Revenues Beat Estimates in Q3

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·3 min read
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Huntsman Corporation HUN recorded profits of $225 million or 94 cents per share in the third quarter of 2021, rising from $57 million or 22 cents in the year-ago quarter.

Barring one-time items, adjusted earnings per share rose to $1.08 in the reported quarter from 32 cents in the year-ago quarter. The bottom line topped the Zacks Consensus Estimate of 91 cents.

Revenues were $2,285 million, up 51.3% year over year from $1,510 million. The top line also surpassed the Zacks Consensus Estimate of $2,019.2 million. The company witnessed higher sales across all segments in the reported quarter and reaped the benefits of economic recovery, higher average selling prices, synergies arising from its recent acquisitions, and certain cost-saving initiatives that it has undertaken.

Segment Highlights

Polyurethanes: Revenues from the segment rose 50% year over year to $1,403 million in the reported quarter due to higher MDI (methylene diphenyl diisocyanate) average selling prices in all the regions. A slight increase in sales volumes, primarily due to stronger demand from the economic revival, although partially offset by Hurricane Ida, also positively impacted revenues.

Performance Products: Revenues surged 68% to $399 million due to increased average selling prices led by strong demand on market recovery and higher raw-material costs. Volumes rose due to stronger demand.

Advanced Materials: Revenues from the unit jumped 53% to $304 million on higher average selling prices, increased volumes, the benefits of Gabriel acquisition, and the recent divestiture of the India-based DIY business. Sales volumes increased across all its specialty markets on the back of a global market recovery. Average selling prices increased in response to higher raw-material costs.

Textile Effects: Revenues from the division rose 32% to $188 million. The increase was due to higher sales volumes led by market recovery and a rise in average selling prices in response to increasing freight and logistics costs.

Financials

Huntsman had total cash of $505 million at the end of the quarter, falling 57% year over year. Adjusted free cash flow used in continuing operations was $110 million in the quarter, declining from $189 million a year ago. Long-term debt was $1,567 million, rising from $1,557 million.

Outlook

The company is seeing strong pent-up demand across its businesses amid supply chain disruptions. Its strong balance sheet along with cash generation allows it to continue returning capital to shareholders. Moreover, it is investing in high-return organic projects that will boost its total returns and improve margins over the next 24 to 36 months.

Price Performance

Huntsman's shares have rallied 30.1% in the past year compared with the industry’s 24% growth.

Zacks Investment Research
Zacks Investment Research

Image Source: Zacks Investment Research

Zacks Rank & Key Picks

Huntsman currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the basic materials space include Methanex Corporation MEOH, Olin Corporation OLN, and Arkema S.A. ARKAY, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Methanex has a projected earnings growth rate of 429% for the current year. The company’s shares have jumped 51.7% over a year.

Olin has a projected earnings growth rate of 740% for the current year. The company’s shares have grown 229.3% over a year.

Arkema has a projected earnings growth rate of 88.7% for the current year. The company’s shares have surged 110.3% over a year.


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