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Olin's (OLN) Earnings and Revenues Beat Estimates in Q3

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Olin Corporation OLN slipped to a loss of $736.8 million or $4.67 per share in third-quarter 2020 from a profit of $44.2 million or 27 cents per share a year ago.

Excluding one-time items, adjusted loss for the quarter was 20 cents per share, narrower than the Zacks Consensus Estimate of a loss of 23 cents.

The chemical maker’s revenues fell roughly 9% year over year to $1,437.6 million in the quarter. It, however, surpassed the Zacks Consensus Estimate of $1,395.5 million. Weaker year-over-year pricing and volumes hurt sales across the Chlor Alkali Products & Vinyls and Epoxy segments 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 fell roughly 14% year over year to $755.1 million in the reported quarter on reduced volumes and lower caustic soda and ethylene dichloride pricing.

Epoxy: Revenues at the division dropped around 7% year over year to $476.1 million on reduced epoxy resin volumes and lower product prices.

Winchester: Revenues rose around 9% year over year to $206.4 million on increased commercial ammunition sales.

Financials

Olin ended the quarter with cash and cash equivalents of $282.7 million, up roughly 59% year over year. Long-term debt was $3,959.5 million at the end of the quarter, up around 19% year over year.

Outlook

Olin said that it saw sequential pricing improvement in the third quarter for chlorine and almost all chlorine derivatives and its newly established Electrochemical Unit (“ECU”). The company expects its recent price increases for chlorine, epoxy resins, ethylene dichloride, bleach and chlorinated organics to favorably contribute to ECU profit contribution index in the fourth quarter. However, Olin envisions volumes in the fourth quarter to be challenged on customer year-end inventory reductions and the company selectively selling less into poor quality markets.

Price Performance

Shares of Olin have lost 4.4% over a year compared with the industry's decline of 1.2%.

 

 

 

Zacks Rank & Key Picks

Olin currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks worth considering in the basic materials space include Agnico Eagle Mines Limited AEM, Barrick Gold Corporation GOLD and B2Gold Corp. BTG.

Agnico Eagle has a projected earnings growth rate of 103.1% for the current year. The company’s shares have gained around 34% 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.

Barrick Gold has an expected earnings growth rate of 100% for the current year. The company’s shares have surged around 62% in the past year. It currently carries a Zacks Rank #2 (Buy).

B2Gold has a projected earnings growth rate of 250% for the current year. The company’s shares have shot up roughly 77% in a year. It currently carries a Zacks Rank #2.

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