Innospec's (IOSP) Earnings Beat Estimates in Q2, Revenues Lag
Innospec Inc. IOSP recorded a profit of $28.9 million or $1.16 per share in second-quarter 2023, down from a profit of $32.3 million or $1.29 in the year-ago quarter.
Barring one-time items, earnings came in at $1.28 per share, down from $1.58 per share a year ago. It beat the Zacks Consensus Estimate of $1.27.
The company’s revenues rose roughly 3% year over year to $480.4 million in the quarter. It missed the Zacks Consensus Estimate of $495.3 million. The company saw strong results in its Oilfield Services unit in the reported quarter, which was partly offset by the weakness in the Performance Chemicals segment.
Innospec Inc. Price, Consensus and EPS Surprise
Innospec Inc. price-consensus-eps-surprise-chart | Innospec Inc. Quote
Segment Highlights
The Performance Chemicals unit logged sales of $127.8 million, down around 24% year over year, hurt by lower volumes and unfavorable mix. It was below the consensus estimate of $155 million. Volumes and mix were impacted by destocking and the sale of higher cost inventories.
Revenues in the Fuel Specialties segment fell 13% year over year to $154.2 million in the reported quarter as lower volumes more than offset favorable price/mix. The figure was below the consensus estimate of $188 million.
Revenues in the Oilfield Services division climbed 62% to $198.4 million, aided by the strength in production chemicals. It was above the consensus estimate of $166 million.
Balance Sheet
Innospec ended the quarter with cash and cash equivalents of $165.9 million, up around 132% year over year.
Cash from operating activities was $55 million for the reported quarter.
Outlook
Innospec said that it remains focused on executing a number of margin and efficiency improvement actions, which it expects will benefit its performance. The company continues to invest in organic growth and pursue complimentary mergers and acquisitions while returning value to shareholders through dividend growth and share buybacks.
Price Performance
Shares of Innospec have gained 9% over a year, outperforming the industry’s 2.1% rise.
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Zacks Rank & Other Key Picks
Innospec currently carries a Zacks Rank #4 (Sell).
Better-ranked stocks worth a look in the basic materials space include Carpenter Technology Corporation CRS, PPG Industries, Inc. PPG and Universal Stainless & Alloy Products, Inc. USAP.
The Zacks Consensus Estimate for current fiscal-year earnings for CRS is currently pegged at $3.43, implying year-over-year growth of 200.9%. Carpenter Technology currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Carpenter Technology has a trailing four-quarter earnings surprise of roughly 10%, on average. The stock has rallied around 57% in a year.
PPG Industries currently carries a Zacks Rank #1. The Zacks Consensus Estimate for PPG's current-year earnings has been revised 3.6% upward over the past 60 days.
PPG Industries’ earnings beat the Zacks Consensus Estimate in three of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 7.3%, on average. PPG shares have gained around 5% in a year.
Universal Stainless & Alloy Products currently carrying a Zacks Rank #2 (Buy). It has a projected earnings growth rate of 160.8% for the current year.
The Zacks Consensus Estimate for USAP's current-year earnings has been revised 181% upward over the past 60 days. USAP shares are up around 74% in a year.
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