Olin Corporation OLN recorded a loss of $120.1 million or 76 cents per share in second-quarter 2020 against loss of $20 million or 12 cents per share a year ago.
Excluding one-time items, adjusted loss for the quarter was 63 cents per share, wider than the Zacks Consensus Estimate of a loss of 49 cents.
The chemical maker’s revenues fell 22% year over year to $1,241.2 million in the quarter. It also lagged the Zacks Consensus Estimate of $1,268.4 million. Weaker demand hurt sales across Chlor Alkali Products & Vinyls and Epoxy segments in the quarter.
Olin Corporation Price, Consensus and EPS Surprise
Olin Corporation price-consensus-eps-surprise-chart | Olin Corporation Quote
Segment Review
Chlor Alkali Products and Vinyls: Revenues at the division fell roughly 28% year over year to $651.2 million in the reported quarter on reduced volumes and lower caustic soda and ethylene dichloride pricing.
Epoxy: Revenues at the division dropped around 23% year over year to $397.4 million on reduced epoxy resin volumes and lower product prices.
Winchester: Revenues rose around 17% year over year to $192.6 million on increased commercial ammunition sales.
Financials
Olin ended the quarter with cash and cash equivalents of $237.9 million, up roughly 87% year over year. Long-term debt was $4,073.9 million at the end of the quarter, up around 26% year over year.
Outlook
Moving ahead, the company said that Chlor Alkali Products & Vinyls and Epoxy units remain challenged amid the current economic conditions and visibility around future demand remains limited.
Olin envisions adjusted EBITDA for the third quarter to be more than double second-quarter levels on improved sales volumes, reduced maintenance turnaround costs and higher product pricing.
The company also expects the U.S. Army Lake City contract to increase Winchester’s annual revenues by $450-$550 million. Moreover, it anticipates commercial ammunition demand to continue to increase through the balance of 2020.
Price Performance
Shares of Olin have lost 33.2% over a year compared with the industry’s decline of 3%.
Zacks Rank & Key Picks
Olin currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the basic materials space include Barrick Gold Corporation GOLD, Gold Fields Limited GFI and Eldorado Gold Corporation EGO.
Barrick Gold has a projected earnings growth rate of 72.6% for the current year. The company’s shares have gained around 65% in a year. It currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Gold Fields has a projected earnings growth rate of 35.7% for the current year. The company’s shares have rallied roughly 128% in a year. It currently carries a Zacks Rank #2.
Eldorado Gold has an expected earnings growth rate of 2,025% for the current year. The company’s shares have shot up around 62% in the past year. It presently carries a Zacks Rank #2.
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