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Univar's (UNVR) Earnings and Revenues Top Estimates in Q4

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·4 min read
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Univar Solutions Inc. UNVR recorded profits of $156.8 million or 91 cents per share in fourth-quarter 2021 against a loss of $33.7 million or 20 cents per share in the year-ago quarter.

Barring one-time items, earnings per share were 60 cents, up from 34 cents in the year-ago quarter. The bottom line surpassed the Zacks Consensus Estimate of 45 cents.

The company’s revenues were $2,498.1 million in the quarter, up around 23% year over year. The top line beat the Zacks Consensus Estimate of $2,351 million.

The growth in sales was attributable to the favorable impact of chemical price inflation, marker share gains and operational execution. However, this was partly offset by the exit of the Canadian Agriculture wholesale distribution business and the divestiture of Distrupol.

Univar Solutions Inc. Price, Consensus and EPS Surprise

Univar Solutions Inc. Price, Consensus and EPS Surprise
Univar Solutions Inc. Price, Consensus and EPS Surprise

Univar Solutions Inc. price-consensus-eps-surprise-chart | Univar Solutions Inc. Quote

Segment Review

Revenues from the USA division climbed around 32% year over year to $1,614 million in the quarter. The upside was primarily driven by higher chemical prices, operational execution and market share gains.

The EMEA segment raked in revenues of $480.9 million, up roughly 12% year over year. Chemical price inflation, increased consumer solutions end market demand, operational execution and market share gains were partly offset by the effects of the Distrupol divestiture.

Revenues from the Canada segment went down around 5% year over year to $245.4 million. The decline was mainly due to the Canadian Agriculture wholesale distribution exit and the divestiture of Canadian Agriculture services.

Revenues from the LATAM unit rose roughly 27% to $157.8 million, driven mainly by higher chemical prices, operational execution and market share gains.

FY21 Results

Earnings (as reported) for full-year 2021 were $2.69 per share compared with 31 cents per share a year ago. Revenues were $9,535.5 million for the full year, up around 15% year over year.

Financials

Univar ended 2022 with cash and cash equivalents of $251.5 million, a roughly 35% year-over-year decline. Long-term debt was $2,223.5 million, down around 10%.

Net cash provided by operating activities was $175.2 million in the fourth quarter, up from $145.3 million a year ago.

Outlook

The company expects adjusted EBITDA for first-quarter 2022 to be in the range of $260-$280 million. For 2022, adjusted EBITDA is forecast in the band of $860-$890 million. Its adjusted EBITDA was $797.7 million in 2021. The company also sees net free cash flow for 2022 in a range of $430-$445 million.

Univar also expects to achieve the targeted $120 million in annual net synergies from the Nexeo acquisition by early 2022 and anticipates continued strong liquidity.

Price Performance

Univar’s shares have gained 49.8% over a year compared with the 3.3% rise of the industry.

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Zacks Rank & Other Stocks to Consider

Univar carries a Zacks Rank #3 (Hold).

Better-ranked stocks worth considering in the basic materials space include Commercial Metals Company CMC, Cabot Corporation CBT and AdvanSix Inc. ASIX.

Commercial Metals, sporting a Zacks Rank #1 (Strong Buy), has a projected earnings growth rate of 62% for the current fiscal year. The Zacks Consensus Estimate for CMC's current fiscal year earnings has been revised 22.7% upward over the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.

Commercial Metals beat the Zacks Consensus Estimate for earnings in three of the last four quarters while missed once. It has a trailing four-quarter earnings surprise of roughly 13.1%, on average. CMC has rallied around 38% in a year.

Cabot, carrying a Zacks Rank #2 (Buy), has an expected earnings growth rate of 15.5% for the current fiscal year. CBT's consensus estimate for the current fiscal year has been revised 7.8% upward over the past 60 days.

Cabot beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average being 21.6%. CBT shares have gained around 46% in a year.

AdvanSix, carrying a Zacks Rank #1, has an expected earnings growth rate of 14.6% for the current year. The Zacks Consensus Estimate for ASIX’s current-year earnings has been revised 9.8% upward in the past 60 days.

AdvanSix beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average being 46.9%. ASIX has gained around 33% in a year.


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