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Ingevity's (NGVT) Earnings and Sales Top Estimates in Q4

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·4 min read
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Ingevity Corporation NGVT logged profits of $50.8 million or $1.23 per share in fourth-quarter 2020, up around 15% from $44.3 million or $1.05 per share a year ago.

Adjusted earnings per share for the reported quarter were $1.33, surpassing the Zacks Consensus Estimate of 68 cents.

The company’s revenues rose around 7% year over year to $325.6 million in the quarter. The top line also beat the Zacks Consensus Estimate of $278.5 million.

Adjusted EBITDA went up around 22% year over year to $110.9 million in the quarter.

The company benefited, in the fourth quarter, from higher demand for engineered polymers, sustained recovery of global automotive production and ongoing global paving activity.

Ingevity Corporation Price, Consensus and EPS Surprise

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

Ingevity Corporation price-consensus-eps-surprise-chart | Ingevity Corporation Quote

Segment Review

Revenues from the Performance Chemicals division fell 6% year over year to $164.9 million in the quarter under review. Strong sales growth in engineered polymers were more than offset by a sharp decline in oilfield technologies applications and lower sales in industrial specialties and paving applications.

Revenues from the Performance Materials unit climbed 25% year over year to $160.7 million. The segment benefited from strong automotive production and sales in China and a favorable shift to trucks and SUVs in the United States and Canada.

FY20 Results

Earnings (as reported) for full-year 2020 were $4.48 per share, up from $4.35 per share a year ago. Adjusted earnings were $4.88 per share, down from $4.93 a year ago.

Revenues fell roughly 6% year over year to $1,216.1 million for the full year, hurt by demand weakness due to the coronavirus pandemic.

Balance Sheet

Ingevity ended 2020 with cash and cash equivalents of $257.7 million, a more than four fold year-over-year increase. Long-term debt was $1,267.4 million, up 3% year over year.

Outlook

The company expects sales of between $1.25 billion and $1.30 billion for 2021. It also anticipates adjusted EBITDA of $400-$420 million for the year. Free cash flow is forecast to be at or above $200 million for 2021.

Ingevity sees revenues and adjusted EBITDA to be flat to up slightly for the Performance Chemicals unit for 2021. Moreover, the Performance Materials segment is forecast to deliver double-digit revenue growth.

Price Performance

Shares of Ingevity have gained 11.3% in the past year against the industry’s growth of 16.5%.

Zacks Rank & Key Picks

Ingevity currently carries a Zacks Rank #2 (Buy).

Other top-ranked stocks worth considering in the basic materials space include Fortescue Metals Group Limited FSUGY, Impala Platinum Holdings Limited IMPUY and New Gold Inc. NGD.

Fortescue has a projected earnings growth rate of 74.2% for the current fiscal. The company’s shares have surged around 146% in a year. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Impala Platinum has an expected earnings growth rate of 189.4% for the current fiscal. The company’s shares have rallied around 57% in the past year. It currently carries a Zacks Rank #1.

New Gold has a projected earnings growth rate of 733.3% for the current year. The company’s shares have shot up around 107% in a year. It currently carries a Zacks Rank #2.

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