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Ingevity's (NGVT) Earnings and Sales Beat Estimates in Q3

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·3-min read
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  • NGVT
  • BAS.DE
  • AKE.PA
  • OLN

Ingevity Corporation NGVT slipped to a loss of $4.2 million or 11 cents per share in third-quarter 2021 from a profit of $69.9 million or $1.69 a year ago.

Excluding one-time items, adjusted earnings for the quarter were $1.62 per share, decreasing from $1.79 a year ago but beating the Zacks Consensus Estimate of $1.52.

The company’s top line rose 13.6% year over year to $376.8 million in the quarter, beating the Zacks Consensus Estimate of $357.5 million. In the third quarter, Ingevity benefited from higher volumes and prices in the Performance Chemicals segment. It faced headwinds in the form of raw material cost inflation, supply chain disruptions, and continued microchip shortages.

Adjusted EBITDA went down 6.3% year over year to $119.5 million in the quarter.

Segment Review

The Performance Chemicals division generated revenues of $258.7 million in the reported quarter, rising 37.7% year over year mainly due to significantly higher volume and prices, though being partially offset by increasing costs of raw materials and logistics inflation. The company witnessed robust sales growth in both engineered polymers and industrial specialties. Improved demand for the products boosted engineered polymers while strengthening lubricant, oilfield, adhesive, and dispersant markets together with price increases aided industrial specialties. Pavement technologies sales also increased in the quarter.

Revenues from the Performance Materials unit went down 17.9% year over year to $118.1 million due to the persistent microchip shortage and supply chain issues weighing on automotive production.

Balance Sheet

Ingevity ended the quarter with cash and cash equivalents of $269.4 million. Long-term debt was $1,254.4 million, almost flat sequentially.

Outlook

The company maintained its previous guidance for full-year 2021 sales in the range of $1.32-$1.36 billion and updated the guidance of adjusted EBITDA to $405-$420 million, down from the prior view of $425-$440 million.

Its revised guidance is in view of lowered expectations for Performance Materials and confidence in the continued strong demand for products in the Performance Chemicals portfolio. The company anticipates that the ongoing shortage of microchips, continued logistics headwinds, and raw materials and energy inflation will pose challenges throughout the rest of the year.

Price Performance

Shares of Ingevity have gained 43% in the past year, outperforming the industry’s rise of 27.4%.

Zacks Investment Research
Zacks Investment Research

Image Source: Zacks Investment Research

Zacks Rank & Stocks to Consider

Currently, Ingevity carries a Zacks Rank #4 (Sell).

Better-ranked stocks in the basic materials space include Olin Corporation OLN, sporting a Zacks Rank #1 (Strong Buy), and Arkema S.A. ARKAY and BASF SE BASFY, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Olin has a projected earnings growth rate of 717% for the current year. The company’s shares have grown 226.8% over a year.

Arkema has a projected earnings growth rate of 88.7% for the current year. The company’s shares have risen 42.5% over a year.

BASF has a projected earnings growth rate of 137.5% for the current year. The company’s shares have rallied 98.9% over a year.


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Olin Corporation (OLN) : Free Stock Analysis Report

Ingevity Corporation (NGVT) : Free Stock Analysis Report

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