Huntsman (HUN) Down 4.5% Since Last Earnings Report: Can It Rebound?

A month has gone by since the last earnings report for Huntsman (HUN). Shares have lost about 4.5% in that time frame, underperforming the S&P 500.Will the recent negative trend continue leading up to its next earnings release, or is Huntsman due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers. Huntsman's Q3 Earnings Beat Estimates and Revenues MissHuntsman’s third-quarter 2024 adjusted earnings per share fell to 10 cents from 15 cents in the year-ago quarter. The bottom line beat the Zacks Consensus Estimate of 9 cents.Revenues were $1,540 million, up around 2.2% year over year. The top line missed the Zacks Consensus Estimate of $1,550.7 million.Segment HighlightsPolyurethanes: Revenues from the segment rose 4% year over year to $1,003 million. It beat our estimate of $908.5 million. The revenue increase is primarily due to increasing sales volumes, which were partly offset by reduced MDI average selling prices. Sales volumes increased predominantly owing to increased demand and market share gains in specific markets. MDI average selling prices fell mainly due to weaker supply and demand dynamics. The decline in segment-adjusted EBITDA was largely caused by lower MDI average selling prices and reduced equity earnings from HUN’s minority-owned joint venture in China, which were partially offset by lower fixed costs and higher sales volumes.Performance Products: Revenues moved up 1% to $280 million. It lagged our estimate of $308.2 million. The increase was primarily driven by rising sales volumes, which were partly offset by reduced average selling prices. Sales volumes rose primarily owing to increased demand in the fuels and lubricants, coatings and adhesives markets. The primary reason for the fall in average selling prices was competitive pressure. The drop in segment-adjusted EBITDA was mainly caused by lower average selling prices and an unfavorable sales mix, which were slightly offset by increased sales volumes and lower fixed costs.Advanced Materials: Revenues from the unit declined 3% to $261 million. It fell short of our estimate of $335.3 million. The decline was mostly due to decreased average selling prices, which were slightly compensated by higher sales volumes. Average selling prices fell essentially due to an unfavorable sales mix. Sales volumes increased in the aerospace and coatings markets as markets recovered, which was, however, slightly offset by weaker demand in the industrial market. The decline in segment adjusted EBITDA was mainly due to higher fixed costs.FinancialsFree cash flow from continuing operations was $93 million compared with $117 million in the prior-year quarter. The company had approximately $1.7 billion in combined cash and unused borrowing capacity as of Sept. 30, 2024.The company spent $41 million on capital expenditures from continuing operations compared with $50 million in the prior-year quarter. The net cash generated by operating activities from continuing operations was $134 million.OutlookIn 2024, Huntsman expects capital expenditures to be between $180 million and $190 million. The adjusted effective tax rate is expected to be between 30% and 34%. The company expects its long-term adjusted effective tax rate to be between 22% and 24%. How Have Estimates Been Moving Since Then?In the past month, investors have witnessed a downward trend in estimates review.The consensus estimate has shifted -557.37% due to these changes.VGM ScoresCurrently, Huntsman has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.OutlookEstimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Huntsman has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.Performance of an Industry PlayerHuntsman is part of the Zacks Chemical - Diversified industry. Over the past month, Olin (OLN), a stock from the same industry, has gained 1.5%. The company reported its results for the quarter ended September 2024 more than a month ago.Olin reported revenues of $1.59 billion in the last reported quarter, representing a year-over-year change of -4.9%. EPS of -$0.21 for the same period compares with $0.82 a year ago.For the current quarter, Olin is expected to post earnings of $0.11 per share, indicating a change of -63.3% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.Olin has a Zacks Rank #5 (Strong Sell) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is among the most innovative financial firms. With a fast-growing customer base (already 50+ million) and a diverse set of cutting edge solutions, this stock is poised for big gains. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Huntsman Corporation (HUN): Free Stock Analysis Report Olin Corporation (OLN): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks