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

Olin Corporation OLN posted a profit of $196.6 million or $1.43 per share in fourth-quarter 2022, down from $306.6 million or $1.89 per share in the year-ago quarter. The figure beat the Zacks Consensus Estimate of $1.42.

The chemical maker’s revenues fell roughly 19% year over year to $1,977 million in the quarter. It missed the Zacks Consensus Estimate of $2,025 million. The top line, in the report quarter, was hurt by lower volumes in its chemical businesses. The company witnessed lower sales across its 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 in the division fell roughly 6% year over year to $1,172.8 million in the reported quarter. The downside can be attributed to lower volumes, partly offset by higher pricing.

Epoxy: Revenues in the division went down around 39% year over year to $484.2 million on lower volumes.

Winchester: Revenues fell around 18% year over year to $320 million on lower commercial ammunition shipments, which more than offset increased commercial ammunition pricing and higher military and law enforcement shipments.

FY22 Results

Earnings or full-year 2022 were $8.94 per share, up from $7.96 per share a year ago. Revenues were $9,376.2 million for the full year, up around 5% year over year.

Financials

Olin ended 2022 with cash and cash equivalents of $194 million, up roughly 7% year over year. Long-term debt was $2,571 million at the end of the year, down around 0.3% year over year.

The company repurchased roughly 4.9 million shares of common stock worth $250.1 million during the fourth quarter. It also bought back around 25.7 million shares worth $1,350.7 million in full-year 2022.

Outlook

Moving ahead, the company expects the challenging global economic conditions to continue this year. It sees adjusted EBITDA to be in the range of $1.5-$2 billion for full-year 2023.

Olin expects its chemical businesses to remain exposed to European and North American epoxy demand weakness and soft demand in vinyls intermediate in early 2023, made worse by high levels of Chinese exports due to lingering weak domestic demand in China. It sees results from its chemical businesses to be modestly lower sequentially in first-quarter 2023.

The company also expects results in its Winchester business to increase sequentially in first-quarter 2023, but to decline from the year-ago levels due to lower commercial ammunition shipments.  

Overall, the company sees first-quarter 2023 adjusted EBITDA to decline modestly on a sequential comparison basis.

Price Performanc

Shares of Olin are up 18.5% in the past year against a 3.3% rise of the industry.

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Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

 

Zacks Rank & Other Key Picks

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

Better-ranked stocks worth considering in the basic materials space include Steel Dynamics, Inc. STLD, Commercial Metals Company CMC and Agnico Eagle Mines Limited AEM.

Steel Dynamics currently sports a Zacks Rank #1 (Strong Buy). The Zacks Consensus Estimate for STLD's current-year earnings has been revised 0.4% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.

Steel Dynamics’ earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 11.3%, on average. STLD has rallied around 124% in a year.

Commercial Metals currently carries a Zacks Rank #1. The consensus estimate for CMC's current-year earnings has been revised 9.8% upward in the past 60 days.

Commercial Metals’ earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 16.7%, on average. CMC has gained around 66% in a year.

Agnico Eagle currently carries a Zacks Rank #1. The Zacks Consensus Estimate for AEM’s current-year earnings has been revised 0.4% upward in the past 60 days.

Agnico Eagle beat Zacks Consensus Estimate in three of the last four quarters. It delivered a trailing four-quarter earnings surprise of 26.4% on average. AEM’s shares have gained 22% in the past year.

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Commercial Metals Company (CMC) : Free Stock Analysis Report

Olin Corporation (OLN) : Free Stock Analysis Report

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