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Innophos (IPHS) Earnings Top Estimates in Q4, Sales Flat Y/Y

Anindya Barman

Innophos Holdings, Inc. IPHS swung to a profit of around $4.8 million or 24 cents per share in fourth-quarter 2018 from a loss of roughly $11.3 million or 58 cents a year. The bottom line in the year-ago quarter was hurt by tax reform charges.
Barring one-time items, the company’s adjusted earnings per share were 54 cents per share in the quarter, up 3% year over year. It also topped the Zacks Consensus Estimate of 51 cents.

Net sales were $192.7 million for the reported quarter, flat year over year, as a stabilized base portfolio and pricing actions were offset by the impact of planned discontinuation of a part of the company’s nutrition trading business. 

Innophos Holdings, Inc. Price, Consensus and EPS Surprise


Innophos Holdings, Inc. Price, Consensus and EPS Surprise

Innophos Holdings, Inc. price-consensus-eps-surprise-chart | Innophos Holdings, Inc. Quote

FY18 Results

For 2018, profits were $36.1 million or $1.82 per share, up around 61% from $22.4 million or $1.13 recorded in 2017.

Net sales for the year went up around 11% year over year to record $801.8 million.

Segment Highlights

Revenues at the Food, Health and Nutrition (FHN) segment fell 2% year over year to $113 million in the reported quarter, impacted by the company’s move to discontinue a portion of low-margin nutrition trading business.

The Industrial Specialties (IS) division recorded revenues of $65 million in the quarter, up 1% year over year. Volumes were down 5%, offset by increase in selling price that rose 6%.

Other sales were up 11% year over year to $15 million on higher co-product prices.

Innophos ended 2018 with cash and cash equivalents of $20.2 million, down around 30% year over year. Long-term debt was $300 million, down 3% year over year.  Free cash flow for the fourth quarter was $52 million, a roughly three-fold year-over-year increase.


Innophos expects market conditions in 2019 to be similar as witnessed in 2018. It envisions revenues in 2019 to be mostly in line with the 2018 level. The company expects its base business to remain stable. Adjusted EBITDA is forecast to grow 1-3% in 2019 from $125 million in 2018.

By the end of 2019, the company’s value chain and manufacturing optimization program is forecast to deliver adjusted earnings per share improvement of 10%, representing an estimated run rate of 25-27 cents per share.

The company also expects its capital investments in 2019 to be in line with 2018. Moreover, it anticipates effective tax rate to be in the range of 28-32%.

Zacks Rank & Stocks to Consider

Innophos currently has a Zacks Rank #3 (Hold).

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

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 surged around 117% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.

Israel Chemicals has an expected earnings growth rate of 10.8% for the current year and carries a Zacks Rank #2 (Buy). The company’s shares have rallied around 26% over the past year.  

Mosaic has an expected earnings growth rate of 23.4% for the current year and carries a Zacks Rank #2. Its shares have gained roughly 15% in the past year.

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