Ashland Q3 Earnings and Sales Lag Estimates, Guidance Narrowed

Ashland Global Holdings Inc. ASH recorded a loss of $742 million or $16.21 per share in third-quarter fiscal 2025 (ended June 30) compared with a profit of $6 million or 12 cents in the prior-year quarter.

Barring one-time items, adjusted earnings were $1.04 per share, down from the year-ago quarter’s figure of $1.49. The bottom line missed the Zacks Consensus Estimate of $1.15.

Sales were down 14.9% year over year to $463 million. The top line missed the Zacks Consensus Estimate of $468.4 million. Sales for the fiscal third quarter were adversely impacted by the portfolio optimization actions involving curtailing or divesting certain lower-margin products, lower volumes in Specialty Additives and Personal Care, and reduced pricing in Life Sciences and Intermediates.

Ashland Inc. Price, Consensus and EPS Surprise

Ashland Inc. price-consensus-eps-surprise-chart | Ashland Inc. Quote

ASH’s Segment Highlights

Life Sciences:Sales in the segment were down 17% year over year to $162 million in the reported quarter. The Zacks Consensus Estimate for the same was $170 million. The decline was primarily caused by the divestiture of the Neutraceuticals division and the exit of the low-margin nutrition offerings.

Personal Care:Sales in the division declined 16% year over year to $147 million. The metric met the Zacks Consensus Estimate. The decrease was mostly due to portfolio optimization, mainly attributed to the divestiture of the Avoca business line.

Specialty Additives:Sales in the segment fell 13% year over year to $131 million but beat the Zacks Consensus Estimate of $124 million. The decline was mostly due to the exit from the low-margin construction business to optimize the portfolio.

Intermediates: Sales in the segment went down 8% year over year to $33 million. The figure also missed the consensus estimate of $34.8 million. The overall sales decreased, mostly due to lower prices.

ASH’s Financials

Cash and cash equivalents were $207 million at the end of the quarter, up around 23.2% sequentially. Long-term debt was $1,382 million, up roughly 3.4% over the same time frame.

ASH’s Outlook

For the full fiscal year, Ashland now expects sales to be in the range of $1.825-$1.85 billion and adjusted EBITDA to be $400-$410 million, narrowing from the previous estimate of $1.825-$1.9 billion and $400-$420 million, respectively.

ASH’s Price Performance

Shares of Ashland have lost 42.5% in the past year compared with a 1.3% decline in the industry.

ASH’s Zacks Rank & Key Picks

ASH currently carries a Zacks Rank #5 (Strong Sell).

Better-ranked stocks worth a look in the basic materials space include Royal Gold, Inc. RGLD, Lithium Americas Corp. LAC and MAG SilverCorp. MAG.

Royal Gold is slated to report second-quarter results on Aug. 6. The Zacks Consensus Estimate for earnings is pegged at $1.70 per share. RGLD’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, with the average surprise being 9%. Royal Gold flaunts a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Lithium Americas is expected to report second-quarter results on Aug. 12. The Zacks Consensus Estimate for LAC’s second-quarter earnings is pegged at a loss of 4 cents per share, indicating year-over-year growth of 20%. Lithium Americas’ earnings beat the Zacks Consensus Estimate in one of the last four quarters but missed it in the rest. LAC currently carries a Zacks Rank #2 (Buy).

MAG Silver is slated to report second-quarter results on Aug. 11. The consensus estimate for MAG’s earnings is pegged at 26 cents per share. MAG carries a Zacks Rank #2 at present. MAG Silver’s earnings beat the consensus estimate in three of the last four quarters, while missing it in one, with the average surprise being 2.01%.

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This article originally published on Zacks Investment Research (zacks.com).

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