ASH Q1 Earnings Beat, Sales Miss on Avoca Divestiture, Weak Demand

Ashland Global Holdings Inc. ASH recorded a loss from continuing operations of $14 million or 30 cents per share for the first quarter of fiscal 2026 (ended Dec. 31, 2025) compared with a loss of $166 million or $3.51 per share in the prior-year quarter.

Barring one-time items, adjusted earnings were 26 cents per share, down from the year-ago quarter figure of 28 cents. The bottom line beat the Zacks Consensus Estimate of 23 cents.

Sales were down 5% year over year to $386 million. The top line missed the Zacks Consensus Estimate of $408.3 million. Sales for the first quarter were adversely impacted by the divestiture of its Avoca business, which reduced revenue by roughly $10 million, and softer demand in certain end-markets like coatings, construction, personal care and industrial, along with modest pricing pressure.

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 up 4% year over year to $139 million in the reported quarter. The Zacks Consensus Estimate for the same was $146 million. The year-over-year rise was primarily driven by higher sales volumes within pharma applications, where demand remained resilient.

Personal Care: Sales in the division declined 8% year over year to $123 million. The metric fell short of the Zacks Consensus Estimate of $132 million. The decrease was primarily due to portfolio optimization, mainly attributed to the divestiture of the Avoca business line.

Specialty Additives: Sales in the segment fell 11% year over year to $102 million and missed the Zacks Consensus Estimate of $111 million. The decline was primarily due to the weak coatings demand in China, tougher competition across MEAI, softer North America demand and continued slowdown in global architectural coatings and construction markets. 

Intermediates: Sales in the segment went down 6% year over year to $31 million. The figure beat the consensus estimate of $30.26 million. Overall sales decreased, mostly due to lower pricing across the BDO value chain amid a persistently oversupplied market. 

ASH’s Financials

Cash and cash equivalents were $304 million at the end of the quarter, up around 41.4% sequentially. Long-term debt was $1,387 million, up roughly 0.2% from the prior quarter.

ASH’s Outlook

For fiscal 2026, Ashland expects sales to be in the range of $1.835-$1.905 billion and adjusted EBITDA to be $400-$420 million. Adjusted EPS, excluding intangible amortization, is forecast to deliver double-digit-plus growth on operating improvements and portfolio optimization, while free cash flow conversion is targeted at roughly 50% of adjusted EBITDA, with capital expenditure of about $100 million. 

ASH’s Price Performance

Shares of Ashland are down 4.5% in the past year compared with a 1% decline in the industry.

ASH’s Zacks Rank & Key Picks

ASH currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks worth a look in the basic materials space are Sociedad Quimica y Minera de Chile S.A. SQM, AngloGold Ashanti plc AU, and Methanex Corporation MEOH.

Sociedad is expected to report fourth-quarter results on Feb. 27. SQM sports a Zacks Rank #1 (Strong Buy) at present. The Zacks Consensus Estimate for SQM’s fourth-quarter earnings is pegged at 75 cents, indicating 79% year-over-year growth. You can see the complete list of today’s Zacks #1 Rank stocks here.

AngloGold is scheduled to report fourth-quarter results on Feb. 20. AU carries a Zacks Rank #1 at present. The consensus estimate for AU’s fourth-quarter earnings is pegged at $1.9 per share, indicating 113.5% year-over-year growth.

Methanex is scheduled to report fourth-quarter results on Mar. 5. MEOH carries a Zacks Rank #2 (Buy) at present. The Zacks Consensus Estimate for MEOH’s fourth-quarter earnings is pegged at 81 cents per share, indicating a 35% year-over-year decline.

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

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