Ingevity Corporation NGVT reported profits of $20.2 million or 49 cents per share in second-quarter 2020, down 64.4% from $56.8 million or $1.34 per share a year ago.
Adjusted earnings per share for the reported quarter were 63 cents, in line with the Zacks Consensus Estimate.
The company’s revenues fell 23.3% year over year to $270.6 million in the quarter on account of weaker demand, especially in the automotive industry, fuelled by the economic impacts of the coronavirus pandemic. However, the top line surpassed the Zacks Consensus Estimate of $251.1 million.
Adjusted EBITDA declined 38% year over year to $67.2 million in the quarter.
Ingevity Corporation Price, Consensus and EPS Surprise
Segment Review
Revenues from the Performance Chemicals division declined 18.9% year over year to $186.2 million in the quarter under review. Softened demand in Industrial Specialties and Oilfield Technologies was offset by relatively reasonable strength in Pavement Technologies and Engineered Polymers.
Revenues from the Performance Materials unit decreased 31.4% to $84.4 million. The sales decline in North America was partly offset by the rebounding automotive business in China.
Balance Sheet
Ingevity ended the quarter with cash and cash equivalents of $177.6 million, up 233.2% year over year. Long-term debt was $1,308.5 million, down 4% year over year.
Outlook
The company reaffirmed its sales guidance for 2020 of between $1.1 billion and $1.2 billion. It also anticipates adjusted EBITDA of $310-$350 million for the year.
Price Performance
Shares of Ingevity have lost 40.3% in the past year against the industry’s growth of 27.5%.
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Zacks Rank & Stocks to Consider
The company currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the basic materials space are Royal Gold, Inc. RGLD, Equinox Gold Corp. EQX and B2Gold Corp BTG.
Royal Goldhas a projected earnings growth rate of 62.1% for the current year. The company’s shares have gained 17.2% in a year. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Equinox Gold has a projected earnings growth rate of 255.2% for the current year. The stock has gained around 101% in a year. It currently has a Zacks Rank of 2 (Buy).
B2Gold has an expected earnings growth rate of 257.1% for 2020. The company’s shares have rallied 104.2% in the past year.It is presently a Zacks #2 Ranked player.
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