Yahoo Finance Ingevity (NGVT) Down 12.4% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Ingevity (NGVT). Shares have lost about 12.4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Ingevity 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 catalysts.
Ingevity's Earnings and Revenues Beat Estimates in Q1
Ingevity incurred a first-quarter 2024 loss of $1.54 per share. It posted earnings of $1.35 in the prior-year quarter.
Adjusted earnings in the reported quarter were 52 cents per share, down from $1.09 in the year-ago quarter. The figure beat the Zacks Consensus Estimate of 37 cents.
The company’s revenues declined around 13.4% year over year to $340.1 million in the quarter but beat the Zacks Consensus Estimate of $319.9 million. The decline was mainly due to the repositioning of the Performance Chemicals unit, which included the exit of some end markets within the Industrial Specialties product line.
Segment Highlights
The Performance Chemicals division generated revenues of $147 million in the reported quarter, down around 21% year over year. The Zacks Consensus Estimate for the same was $121.9 million. Road Technologies product line sales of $45.7 million were flat year over year, missing the Zacks Consensus Estimate of $49.5 million. Industrial Specialties product line sales of $101.3 million fell 28% due to the segment's repositioning and decreased industrial demand, beating the Zacks Consensus Estimate of $83.9 million.
Revenues in the Performance Materials unit were up 3% year over year to $145.1 million. It missed the consensus estimate of $149.5 million. The increase was led by higher pricing and larger volumes in automotive end markets across all regions. Segment EBITDA was $78.0 million, up 12% from the previous-year quarter, principally due to decreased input costs, particularly energy and increased operational efficiency, resulting in segment EBITDA margins of 53.8%.
The Advanced Polymer Technologies unit logged sales of $48 million, down 27% year over year, marginally missing Zacks Consensus Estimate of $48.3 million. The segment's end markets are experiencing demand weakening, which resulted in the downside. Segment EBITDA was $9.5 million, marking a 31% plunge owing to decreased volume and price, slightly offset by lower input costs. The segment EBITDA margin was 19.8%.
Financials
First-quarter operating cash flow was negative $12.1 million, with negative free cash flow of $28.7 million, reflecting regular seasonal inventory build in the first quarter and a cash impact of $19.8 million from CTO resale losses.
There were no share repurchases during the quarter, leaving $353.4 million under the current $500 million board authorization. Net leverage was 3.6 times, indicating lower adjusted EBITDA than last year.
Outlook
The company sees its sales for 2024 in the band of $1.4-$1.55 billion and adjusted EBITDA in the range of $365-$390 million.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision flatlined during the past month.
VGM Scores
At this time, Ingevity has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Ingevity has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Ingevity belongs to the Zacks Chemical - Specialty industry. Another stock from the same industry, Ecolab (ECL), has gained 0.9% over the past month. More than a month has passed since the company reported results for the quarter ended March 2024.
Ecolab reported revenues of $3.75 billion in the last reported quarter, representing a year-over-year change of +5.1%. EPS of $1.34 for the same period compares with $0.88 a year ago.
For the current quarter, Ecolab is expected to post earnings of $1.66 per share, indicating a change of +33.9% from the year-ago quarter. The Zacks Consensus Estimate has changed +0.2% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #2 (Buy) for Ecolab. Also, the stock has a VGM Score of C.
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Ingevity Corporation (NGVT) : Free Stock Analysis Report
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