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Olin (OLN) to Report Q4 Earnings: What's in the Offing?

Zacks Equity Research
·4-min read

Olin Corporation OLN is set to release fourth-quarter 2021 results after market close on Jan 27. The company’s productivity actions, the Lake City contract and higher prices are likely to get reflected in its fourth-quarter numbers. However, Olin is likely to have faced headwinds stemming from higher raw material costs.

The company’s earnings beat the Zacks Consensus Estimate in three of the lastfour quarters, while missing the same once. It has a trailing four-quarter negative earnings surprise of roughly 0.5%, on average. The company reported an earnings surprise of 14.4% in the last reported quarter.

Olin’s shares have surged 89.9% in the past year compared with a 4.8% rise of the industry.

Zacks Investment Research
Zacks Investment Research

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Let’s see how things are shaping up for this announcement.

Zacks Model

Our proven model predicts an earnings beat for Olin this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat.

Earnings ESP: Earnings ESP for Olin is +1.95%. The Zacks Consensus Estimate for fourth-quarter earnings is currently pegged at $2.53. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Olin currently carries a Zacks Rank #3.

What do the Estimates Say?

The Zacks Consensus Estimate for Olin’s revenues in the to-be-reported quarter is pegged at $2,338 million, suggesting a year-over-year increase of 41.4%.

The consensus mark for net sales in the Chlor Alkali Products and Vinyls unit is currently pegged at $1,054 million for the fourth quarter, calling for a 32.7% year-over-year increase.

The Zacks Consensus Estimate for the Winchester segment’s net sales is currently pegged at $386 million, suggesting a 13.2% rise from the year-ago quarter’s level. The same for the Epoxy division is pegged at $806 million, indicating a 55% year-over-year increase.

Factors at Play in Q4

The Lake City U.S. Army ammunition contract is likely to have aided the performance of the company’s Winchester business. The multi-year contract is expected to have contributed to sales and profitability in the fourth quarter. The Chlor Alkali Products & Vinyls segment is likely to have gained from higher prices.

Productivity actions are likely to have contributed to fourth-quarter performance. The company expects productivity measures like plant closures as well as raw materials and railcar management to deliver $100 million of net savings for full-year 2021.

The company is expected to have faced challenges from cost-related headwinds in raw materials. It is also likely to have witnessed an impact from seasonality brought by year-end holiday slowdowns. Higher commodity costs are likely to have exerted pressure on the margins of the Winchester unit.

Stocks That Warrant a Look

Here are some other companies in the basic materials space you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat this quarter:

Celanese Corporation CE, scheduled to release earnings on Jan 27, has an Earnings ESP of +2.98% and carries a Zacks Rank #3.You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Celanese's fourth-quarter earnings has been revised 0.6% upward in the past 60 days. The consensus estimate for CE’s earnings for the quarter is currently pegged at $5.05.

CF Industries Holdings, Inc. CF, expected to release earnings on Feb 16, has an Earnings ESP of +9.44% and carries a Zacks Rank #2.

The consensus estimate for CF Industries' fourth-quarter earnings has been revised 31.5% upward in the past 60 days. The Zacks Consensus Estimate for CF’s earnings for the quarter is pegged at $3.25.

Methanex Corporation MEOH, scheduled to release earnings on Jan 26, has an Earnings ESP of +0.52% and carries a Zacks Rank #3.

The Zacks Consensus Estimate for Methanex's fourth-quarter earnings has been revised 4.2% upward in the past 60 days. The consensus estimate for MEOH’s earnings for the quarter is currently pegged at $2.56.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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CF Industries Holdings, Inc. (CF) : Free Stock Analysis Report

Methanex Corporation (MEOH) : Free Stock Analysis Report

Celanese Corporation (CE) : Free Stock Analysis Report

Olin Corporation (OLN) : Free Stock Analysis Report

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