Olin Corporation OLN recorded a profit of $41.7 million or 25 cents per share in first-quarter 2019, up from a profit of $20.9 million or 12 cents per share a year ago.
Adjusted earnings for the quarter were 28 cents per share, missing the Zacks Consensus Estimate of 32 cents.
The chemical maker’s revenues fell roughly 9% year over year to $1,553 million in the quarter, also falling short of the Zacks Consensus Estimate of $1,619 million.
The company witnessed weakness in caustic soda pricing in the quarter. Prices declined 9% on a sequential comparison basis in the quarter. Olin also faced challenges from shipping disruptions related to the closure of the Houston Ship Channel.
Olin Corporation Price, Consensus and EPS Surprise
Olin Corporation price-consensus-eps-surprise-chart | Olin Corporation Quote
Chlor Alkali Products and Vinyls: Revenues at the division fell around 7% year over year to $872.2 million in the quarter, due to lower caustic soda pricing, partly masked by higher chlorine, ethylene dichloride and other chlorine-derivative pricing.
Epoxy: Revenues at the division went down around 13% year over year to $524 million, hurt by reduced cumene volumes and lower product prices.
Winchester: Revenues declined around 8% year over year to $157.2 million, mainly due to lower military and commercial sales.
Olin ended the quarter with cash and cash equivalents of $105.7 million, down around 3% year over year. The company repaid $50 million of debt using its cash during the first quarter. Long-term debt was $3,067.2 million at the end of the quarter, down 13% year over year.
Olin repurchased roughly 0.6 million shares of common stock for around $13.2 million in the quarter.
Moving ahead, Olin expects caustic soda pricing in the second quarter to decline from the first quarter levels. The company expects prices to recover during the second half of 2019.
The company expects second-quarter adjusted EBITDA to be lower than the first quarter due to lower caustic soda pricing and sequentially higher planned maintenance turnaround costs. However, Olin envisions adjusted EBITDA for second-half 2019 to be stronger than the first half.
The company continues to see adjusted EBITDA for 2019 to be comparable to 2018 levels. However, it now believes that there is more downside risk than upside potential for 2019.
Shares of Olin have lost 35.1% in the past year, underperforming the industry’s 23.9% decline.
Zacks Rank and Stocks to Consider
Olin currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the basic materials space include Sandstorm Gold Ltd. SAND, Flexible Solutions International Inc. FSI and Air Products and Chemicals, Inc. APD.
Sandstorm Gold has an expected earnings growth rate of 200% for the current year and carries a Zacks Rank #1 (Strong Buy). The company’s shares have gained around 8% over the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
Flexible Solutions has an expected earnings growth rate of 171.4% for the current year and carries a Zacks Rank #2 (Buy). Its shares have rallied roughly 114% in the past year.
Air Products has an expected earnings growth rate of 10.3% for the current fiscal year and carries a Zacks Rank #2. Its shares have shot up around 26% in the past year.
Radical New Technology Creates $12.3 Trillion Opportunity
Imagine buying Microsoft stock in the early days of personal computers… or Motorola after it released the world’s first cell phone. These technologies changed our lives and created massive profits for investors.
Today, we’re on the brink of the next quantum leap in technology. 7 innovative companies are leading this “4th Industrial Revolution” - and early investors stand to earn the biggest profits.
See the 7 breakthrough stocks now>>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Olin Corporation (OLN) : Free Stock Analysis Report
Air Products and Chemicals, Inc. (APD) : Free Stock Analysis Report
Flexible Solutions International Inc. (FSI) : Free Stock Analysis Report
Sandstorm Gold Ltd (SAND) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research