Ashland Earnings: Here’s Why Investors are Buying Shares Now

Ashland Inc. (NYSE:ASH) delivered a profit and missed Wall Street’s expectations, AND came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are up 2.67%.

Ashland Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share decreased 18.63% to $1.66 in the quarter versus EPS of $2.04 in the year-earlier quarter.

Revenue: Decreased 3.83% to $2.06 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Ashland Inc. reported adjusted EPS income of $1.66 per share. By that measure, the company missed the mean analyst estimate of $1.84. It missed the average revenue estimate of $2.06 billion.

Quoting Management: “Much of the decline in sales and profitability during the third quarter can be attributed to sharply lower guar sales in Ashland Specialty Ingredients when compared to the year-ago period. Excluding guar and the elastomers write-down, our overall performance in the third quarter was encouraging,” said James J. O`Brien, Ashland chairman and chief executive officer. “Each of our four commercial units reported volume increases. Within Ashland Specialty Ingredients, volumes rose 4 percent versus the year-ago period. Our higher-margin pharmaceutical and personal care businesses were particularly strong, with good gains in both sales and volume. Ashland Water Technologies continued to improve, with overall increases in sales and volume driven by our pulp and paper business. Ashland Performance Materials reported a 3 percent volume increase driven by solid gains in our adhesives and composites business. Ashland Consumer Markets delivered another strong quarter as international growth and several successful promotions helped fuel a 26 percent increase in EBITDA compared to a year ago.”

Key Stats (on next page)…

Revenue increased 4.31% from $1.97 billion in the previous quarter. EPS decreased 6.74% from $1.78 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 $1.94 to a profit $1.86. For the current year, the average estimate has moved down from a profit of $6.74 to a profit of $6.59 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at]