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Ingevity (NGVT) Tops Earnings & Revenue Estimates in Q4

Anindya Barman

Ingevity Corporation NGVT recorded a profit (attributable to stockholders) of $42.1 million or 99 cents per share in fourth-quarter 2018, compared with $41.6 million or 97 cents a year ago. Adjusted earnings per share for the reported quarter were $1.07, which surpassed the Zacks Consensus Estimate of 78 cents.

The company’s revenues rose roughly 21% year over year to $278.6 million in the quarter, coming ahead of the Zacks Consensus Estimate of $262.4 million.

Adjusted EBITDA climbed roughly 39% year over year to $73.3 million in the quarter. The chemical maker gained from increased volumes, better price and mix, and reduced raw materials costs.

Ingevity Corporation Price, Consensus and EPS Surprise


Ingevity Corporation Price, Consensus and EPS Surprise | Ingevity Corporation Quote

FY18 Results

For 2018, profit was $169.1 million or $3.97 per share, up roughly 34% from $126.5 million or $2.97 per share recorded in 2017.

Net sales for the year went up around 17% year over year to $1,133.6 million, aided by increased selling prices.

Segment Review

Revenues from the Performance Chemicals division jumped around 20% year over year to $166.1 million in the quarter. Revenues were driven by contributions of Georgia-Pacific pine chemicals acquisition and sales growth in oilfield industry on the back of strong U.S. drilling.

Revenues from the Performance Materials unit went up around 24% to $112.5 million. The growth was supported by sustained adoption of the company’s solutions geared to meet the U.S. EPA Tier 3 and California LEV III automotive emission regulations.

Balance Sheet

Ingevity ended 2018 with cash and cash equivalents of $77.5 million, down around 12% year over year. Long-term debt was $741.2 million, up around 67%.


Ingevity expects sales of between $1.30 billion and $1.36 billion for 2019. Adjusted EBITDA for the year has been forecast in the band of $390 million to $410 million. The company expects revenues to increase roughly 18% and earnings to rise around 25% year over year at the mid-point of its guidance factoring in its acquisition of the Capa caprolactone business.

Price Performance

Shares of Ingevity have rallied 49.1% over a year, significantly outperforming the industry’s 2.4% rise.


Zacks Rank and Stocks to Consider

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

A few better-ranked stocks worth considering in the basic materials space include Kirkland Lake Gold Ltd. KL, The Mosaic Company MOS and Israel Chemicals Ltd. ICL.

Kirkland Lake Gold has an expected earnings growth rate of 20.9% for the current year and carries a Zacks Rank #1 (Strong Buy). Its shares have shot up 123% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.

Mosaic has an expected earnings growth rate of 23.5% for the current year and carries a Zacks Rank #2 (Buy). Its shares have gained 26% in the past year.

Israel Chemicals has an expected earnings growth rate of 10.8% for the current year and carries a Zacks Rank #2. The company’s shares have rallied 35% over the past year.

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