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Olin's (OLN) Earnings Miss Estimates in Q4, Revenues Beat

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Olin Corporation OLN posted a loss of $33 million or 21 cents per share in fourth-quarter 2020 compared with a loss of $77.2 million or 49 cents per share a year ago.

Excluding one-time items, adjusted loss for the quarter was 12 cents per share, wider than the Zacks Consensus Estimate of a loss of 8 cents.

The chemical maker’s revenues went up roughly 19% year over year to $1,654.1 million in the quarter. It also surpassed the Zacks Consensus Estimate of $1,460.6 million. The company saw higher sales across its segments in the fourth quarter. It benefited from higher ECU (Electrochemical Unit) pricing in the quarter.

Olin Corporation Price, Consensus and EPS Surprise

Olin Corporation Price, Consensus and EPS Surprise
Olin Corporation Price, Consensus and EPS Surprise

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

Segment Review

Chlor Alkali Products and Vinyls: Revenues at the division rose roughly 4% year over year to $793.7 million in the reported quarter as lower volumes were more than offset by higher ECU pricing, especially ethylene dichloride and chlorine.

Epoxy: Revenues at the division went up around 11% year over year to $519.8 million on higher wind energy and aromatics volumes.

Winchester: Revenues more than doubled year over year to $340.6 million on increased commercial and military sales as well as higher commercial ammunition pricing. The unit started operating the Lake City U.S. Army Ammunition plant on Oct 1. The segment also achieved record quarterly earnings in the fourth quarter.

FY20 Results

Loss (as reported) for full-year 2020 was $6.14 per share, compared with a loss of 7 cents per share a year ago. Revenues dropped around 6% year over year to roughly $5,758 million for the full year.

Financials

Olin ended 2020 with cash and cash equivalents of $189.7 million, down roughly 14% year over year. Long-term debt was $3,837.5 million at the end of the year, up around 15% year over year.

Outlook

Olin expects adjusted EBITDA for the first quarter of 2021 to improve on a sequential comparison basis.

The company expects its recent price hike announcements for chlorine, epichlorohydrin, epoxy resins, bleach, ethylene dichloride and chlorinated organics to favorably contribute to its Chemicals businesses in the first quarter. The company envisions some volume offsets as it is selectively selling less into poor quality markets. Olin also sees its productivity actions to positively contribute to first-quarter results. The company also expects higher performance for its Winchester business in 2021.

Price Performance

Shares of Olin have rallied 58.8% over a year compared with the industry's rise of 21.5%.

Zacks Rank & Key Picks

Olin 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 75.5% for the current fiscal. The company’s shares have surged around 126% 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 42% in the past year. It currently carries a Zacks Rank #1.

New Gold has a projected earnings growth rate of 658.3% for the current year. The company’s shares have shot up around 115% in a year. It currently carries a Zacks Rank #2.

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Olin Corporation (OLN) : Free Stock Analysis Report

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