Element Solutions Inc.
ESI
recorded earnings (as reported) from continuing operations of 12 cents per share in fourth-quarter 2020 compared with 29 cents in the year-ago quarter.
Adjusted earnings per share (EPS) of 31 cents for the quarter were in line with the Zacks Consensus Estimate.
The company generated net sales of $536.6 million, up around 18% year over year. Organic net sales, barring the impact of currency changes, specific pass-through metal prices and acquisitions, rose 10% year over year.
The company saw a rebound in its industrially oriented businesses in the fourth quarter. Its high-end electronics business also continued its momentum in the quarter. Element Solutions witnessed record net sales and adjusted EBITDA in the fourth quarter since its launch in February 2019.
Element Solutions Inc. Price, Consensus and EPS Surprise
Element Solutions Inc. price-consensus-eps-surprise-chart
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Element Solutions Inc. Quote
Segment Highlights
Net sales in the Electronics segment rose 26% year over year to $343 million in the reported quarter. Organic net sales increased 16% from the year-ago quarter’s reported figure. Adjusted EBITDA was $81 million, up 30% year over year.
Net sales in the Industrial & Specialty unit went up 6% year over year to $193 million. Organic net sales moved up 1% year over year. Adjusted EBITDA in the segment was $45 million, up 13% year over year.
Financial Position
Element Solutions ended the year with cash and cash equivalents of $291.9 million, up 53.6% year over year. Long-term debt was $1,508.1 million at the end of the year, down 0.3% year over year.
The company generated cash flows from operating activities of $81.7 million in the reported quarter. Free cash flows for the quarter were $75 million.
Outlook
The company expects adjusted EBITDA growth of around 7% year over year in 2021. The company is also projecting a 15-20% increase in adjusted EPS to the range of $1.10-1.15. Moreover, it anticipates generating free cash flow of roughly $275 million for 2021.
Element Solutions believes that 2021 could be a record year for its business. It expects full year cash flow generation to be a record, which will provide flexibility for additional capital deployment toward acquisitions, share repurchases and potentially increased dividends.
Price Performance
Shares of Element Solutions have surged 68.1% in a year compared with 24.9% rise of the
industry
.
Zacks Rank & Key Picks
Element Solutions currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the basic materials space are
Fortescue Metals Group Limited
FSUGY
,
BHP Group
BHP
and
Impala Platinum Holdings Limited
IMPUY
.
Fortescue has a projected earnings growth rate of 84.3% for the current fiscal. The company’s shares have surged around 177.4% in a year. It currently carries a Zacks Rank #2 (Buy). You can see
the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
BHP has an expected earnings growth rate of 65.6% for the current fiscal. The company’s shares have gained around 72.3% in the past year. It currently carries a Zacks Rank #2.
Impala has an expected earnings growth rate of 195.9% for the current fiscal. The company’s shares have rallied around 76.1% in the past year. It currently sports a Zacks Rank #1.
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