Huntsman (HUN) Tops Earnings and Revenue Estimates in Q3
Huntsman Corporation HUN recorded profit of $57 million or 22 cents per share in third-quarter 2020, up from a profit of $41 million or 13 cents in the year-ago quarter.
Barring one-time items, adjusted earnings per share were 32 cents in the quarter. The figure topped the Zacks Consensus Estimate of 25 cents.
Revenues were $1,510 million, down around 10% year over year. However, the top line surpassed the Zacks Consensus Estimate of $1,466.9 million. The company saw lower sales across its business segments in the reported quarter.
Huntsman Corporation Price, Consensus and EPS Surprise
Huntsman Corporation price-consensus-eps-surprise-chart | Huntsman Corporation Quote
Segment Highlights
Polyurethanes: Revenues for the segment fell 6% year over year to $936 million in the reported quarter due to lower MDI (methylene diphenyl diisocyanate) average selling prices. Overall polyurethanes sales volumes were essentially flat when including sales volumes related to the Icynene-Lapolla acquisition.
Performance Products: Revenues for the unit declined 15% to $238 million due to reduced average selling prices as well as lower sales volumes resulting from the global economic slowdown.
Advanced Materials: Revenues for the unit dropped 22% to $199 million on lower sales volumes due to customer destocking and global economic slowdown, and reduced average selling prices.
Textile Effects: Revenues for the division fell 21% to $142 million. The decline was due to reduced sales volumes and average selling prices.
Financials
Huntsman had total cash of $1,168 million at the end of the quarter, up nearly three fold year over year. Long-term debt was $1,557 million, down around 29% year over year.
Net cash provided by operating activities from continuing operations was $65 million for the reported quarter while free cash flow was $11 million.
Outlook
Moving ahead, Huntsman said that it is witnessing positive momentum entering the fourth quarter. It remains on track in integrating of two downstream acquisitions completed earlier this year and delivering more than $100 million of targeted annualized savings from its cost optimization initiative by the end of next year. The company also remains focused on growing its differentiated businesses and enhancing shareholder value.
Price Performance
Huntsman's shares are up 9.1% in the past year against the industry’s 1.8% decline.
Zacks Rank & Key Picks
Huntsman currently carries a Zacks Rank #2 (Buy).
Other top-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 102.1% for the current year. The company’s shares have gained around 28% 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 51% in the past year. It currently carries a Zacks Rank #2.
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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