FTSE 100: Index falls as earnings results weigh; pound below $1.33, Bodycote soars
Tuesday, Huntsman Corporation (NYSE:HUN) shares maintained their Neutral rating with a steady price target of $18.00, following commentary from Citi analysts. Currently trading at $16.99, the chemical manufacturer shows a Fair Value alignment according to InvestingPro analysis, while maintaining an attractive 5.9% dividend yield that has grown consistently for four consecutive years. The chemical company reported an adjusted EBITDA of $71 million, which fell short of both the consensus and Citi's estimate of $74 million. Earnings per share (EPS) also missed the mark, coming in at a loss of $0.25 compared to the consensus estimate of a $0.10 loss and Citi's estimate of a $0.06 loss. While current performance shows challenges, InvestingPro data reveals that analysts expect the company to return to profitability this year, with 8 additional exclusive insights available to subscribers.
The Polyurethane segment's adjusted EBITDA was slightly below Citi's projection of $52 million, despite a 9% year-over-year increase in sales volume and higher average margins. These gains, alongside cost savings, were somewhat negated by decreased equity earnings from the China PO/MTBE joint venture. Performance Products (PP) segment's adjusted EBITDA was also slightly disappointing at $23 million, compared to an estimated $25 million, primarily due to an 11% year-over-year decline in sales volume. This was attributed to an unplanned outage at the European maleic anhydride facility, which has a capacity of 105,000 tons per year, during the fourth quarter.
The Advanced Materials (AM) segment's adjusted EBITDA met expectations, but the aerospace returns were adversely affected by supply chain disruptions stemming from a Boeing (NYSE:BA) strike. Corporate expenses aligned with forecasts but increased year-over-year due to higher legal expenses and LIFO inventory losses.
Looking ahead, Huntsman provided a first-quarter 2025 guidance with an adjusted EBITDA midpoint of $85 million, which is below the $105 million consensus. This projection sets a cautious tone for the company's performance in the upcoming quarter. Despite near-term challenges, the company maintains a solid financial health score of "FAIR" according to InvestingPro's comprehensive analysis, which includes detailed metrics and projections available in the Pro Research Report, part of the platform's coverage of over 1,400 US equities.
In other recent news, Huntsman Corporation maintains a neutral rating from Citi, reflecting the firm's analysis of various market dynamics. The rating was reiterated following a meeting between Citi analysts and Huntsman executives, where the focus was on potential influencers of Huntsman's performance, including the housing market and China's economic trajectory post-stimulus announcements.
U.S. tariffs, while not directly affecting Huntsman, were discussed for their broader economic impact, particularly on China, which could indirectly influence the company. Another point of interest was the market dynamics of Methylene diphenyl diisocyanate (MDI), a key product for Huntsman, which sees stable demand within the U.S.
The company also identified Advanced Materials as a potential growth area. However, significant moves in mergers and acquisitions are expected to be on hold as the company prioritizes maintaining a strong balance sheet. These are some of the recent developments that are shaping Huntsman's business landscape.
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