Ashland Inc. (NYSE:ASH) delivered a profit and beat Wall Street’s expectations, AND met the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company.
Ashland Inc. Earnings Cheat Sheet
Results: Adjusted Earnings Per Share increased 17.11% to $1.78 in the quarter versus EPS of $1.52 in the year-earlier quarter.
Revenue: Decreased 3.8% to $2 billion from the year-earlier quarter.
Actual vs. Wall St. Expectations: Ashland Inc. reported adjusted EPS income of $1.78 per share. By that measure, the company beat the mean analyst estimate of $1.54. It met the average revenue estimate of $2 billion.
Quoting Management: “We faced a number of challenges in the second quarter, including economic weakness in several key regions, particularly Europe,” said James J. O`Brien, Ashland chairman and chief executive officer. “Each of our four commercial units reported year-over-year declines in sales in the face of soft demand. From a sequential standpoint, our performance was more encouraging. Sales at Ashland Specialty Ingredients grew 10 percent compared to the December quarter. Ashland Water Technologies` performance has stabilized, and we expect continued improvement going forward. Ashland Performance Materials improved from the December quarter, with gains in sales and volumes consistent with seasonality. Ashland Consumer Markets turned in another strong earnings performance, both sequentially and year-over-year, as lower raw-material costs drove significant gains in EBITDA. During the second quarter, we also strengthened our capital structure by restructuring our debt to lock in attractive interest rates, extend our maturity schedule and put in place investment-grade covenants.”
Key Stats (on next page)…
Revenue increased 7.01% from $1.87 billion in the previous quarter. EPS increased 58.93% from $1.12 in the previous quarter.
Looking Forward: Analysts have a more negative outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has fallen from a profit of $2.20 to a profit $1.97. For the current year, the average estimate has moved down from a profit of $7.62 to a profit of $6.72 over the last ninety days.
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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)