Huntsman's (HUN) Earnings Miss, Sales Beat Estimates in Q4

·4 min read

Huntsman Corporation HUN slipped to a loss of $91 million or 48 cents per share in the fourth quarter of 2022 from a profit of $597 million or $2.73 in the year-ago quarter.

Barring one-time items, adjusted earnings per share fell 96% to 4 cents in the reported quarter from 89 cents in the year-ago quarter. The bottom line lagged the Zacks Consensus Estimate of 11 cents.

Revenues were $1,650 million, down around 22% year over year. The top line, however, beat the Zacks Consensus Estimate of $1,556.9 million.

Huntsman Corporation Price, Consensus and EPS Surprise

Huntsman Corporation Price, Consensus and EPS Surprise
Huntsman Corporation Price, Consensus and EPS Surprise

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

Segment Highlights

Polyurethanes: Revenues from the segment fell 23% year over year to $1,071 million in the reported quarter, hurt by reduced sales volumes and unfavorable currency translation, partly offset by higher MDI (methylene diphenyl diisocyanate) average selling prices. Volumes fell mainly due to lower demand, especially in European and American markets.

Performance Products: Revenues fell 25% to $307 million courtesy of lower sales volumes resulting from weak demand for certain products, which were partially offset by higher average selling prices resulting from a rise in raw material costs.

Advanced Materials: Revenues from the unit went down 12% to $278 million primarily due to lower sales volume resulting from weak demand prevailing in the industrial market and the deselection of lower margin businesses. These headwinds were offset by higher demand in the aerospace market, rise in average selling prices and improvement in the sales mix.

FY22 Results

Earnings for full-year 2022 were $2.27 per share compared with $4.72 a year ago. Net sales rose 5% to $8,023 million.

Financials

Huntsman had total cash of $654 million at the end of the quarter, down around 37% year over year. Long-term debt amounted to $1,671 million, up roughly 9%.

Net cash provided by operating activities from continuing operations was $297 million in the reported quarter. Free cash flow from continuing operations was $211 million compared with $648 million in the year-ago quarter.

Outlook

Huntsman expects its business fundamentals to improve as it sees higher demand in aerospace and automotive business and expects consumer destocking to end in the first half of 2023. However, the company expects its performance in the second half to be soft, as it is still seeing weakness in the global construction market.

Huntsman remains focused on creating shareholder value and is constantly working toward implementing its cost-reduction programs and making strategic investments to further improve its core business.

Price Performance

Shares of Huntsman have declined 27.7% in the past year against a 9.4% rise of the industry.

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Zacks Rank & Key Picks

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

Some better-ranked stocks to consider in the basic materials space are Alpha Metallurgical Resources, Inc. AMR, ATI Inc. ATI and Nucor Corporation NUE. ATI and NUE currently sport a Zacks Rank #1 (Strong Buy), while AMR carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.  

Alpha Metallurgical’s shares have gained 80.1% in the past year. The Zacks Consensus Estimate for AMR’s current-year earnings has been revised 1.7% upward in the past 60 days. The company has an earnings growth rate of 425% for the current year.

Alpha Metallurgical topped Zacks Consensus Estimate in two of the last four quarters. It delivered a trailing four-quarter earnings surprise of 1.1% on average.

ATI’s shares have gained 71.5% in the past year. The Zacks Consensus Estimate for ATI’s current-year earnings has been revised 0.9% upward in the past 60 days. The company has an earnings growth rate of 8% for the current year.

ATI topped Zacks Consensus Estimate in all the last four quarters. It delivered a trailing four-quarter earnings surprise of 32.4% on average.

Nucor’s shares have gained 38.7% in the past year. The Zacks Consensus Estimate for NUE’s current-year earnings has been revised 12.5% upward in the past 60 days.

Nucor topped Zacks Consensus Estimate in all the last four quarters. It delivered a trailing four-quarter earnings surprise of 7.7% on average.




 



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