Company Overview - Avient (AVNT) is expected to report a year-over-year increase in earnings, with a projected quarterly earnings of $0.78 per share, reflecting a +2.6% change, and revenues of $851.39 million, up 0.2% from the previous year [3][12] Earnings Expectations - The earnings report is anticipated to be released on August 1, and the stock may rise if the results exceed expectations, while a miss could lead to a decline [2][12] - The consensus EPS estimate has been revised 1.66% lower in the last 30 days, indicating a reassessment by analysts [4] Earnings Surprise Prediction - The Most Accurate Estimate for Avient is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -1.22%, which suggests a bearish outlook from analysts [12] - The stock currently holds a Zacks Rank of 4 (Sell), complicating predictions for an earnings beat [12] Historical Performance - In the last reported quarter, Avient had an earnings surprise of +1.33%, with actual earnings of $0.76 per share against an expectation of $0.75 [13] - Over the past four quarters, Avient has beaten consensus EPS estimates four times [14] Industry Context - Huntsman (HUN), a competitor in the Zacks Chemical - Diversified industry, is expected to report a loss of $0.15 per share, marking a year-over-year decline of -207.1%, with revenues projected at $1.48 billion, down 5.8% [18] - Huntsman's consensus EPS estimate has been revised down by 35.3% in the last 30 days, but it currently has an Earnings ESP of +19.23%, despite a Zacks Rank of 5 (Strong Sell) [19]

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Core Insights - Avient Corporation (AVNT) has launched ColorMatrix Amosorb Oxyloop-1, the first product in its new oxygen scavengers portfolio aimed at enhancing the recyclability of Polyethylene Terephthalate (PET) packaging [1][7] - The Oxyloop-1 grade has received endorsement from the European Platform for Bottle Packaging (EPBP), meeting high industry standards for recyclability and food contact regulatory requirements [2] - This non-nylon-based product is compatible with recycled PET, allowing for up to 100% recycled content, and is designed to maintain product freshness and shelf life [3][4] Product Features - Oxyloop-1 offers excellent oxygen scavenging performance, making it suitable for packaging applications such as juices and vitamin drinks [2][3] - The product maintains bottle clarity and reduces yellowing, enhancing aesthetic appeal while supporting sustainability goals [3][4] - Avient's commitment to reducing environmental impact is reflected in the introduction of this product, which aligns with brand owners' sustainability objectives [4] Market Performance - Avient's stock has decreased by 26.3% over the past year, while the industry has seen a decline of 17.8% [4] - The company currently holds a Zacks Rank of 3 (Hold), indicating a neutral outlook compared to better-ranked stocks in the Basic Materials sector [6]

Group 1 - Avient Corporation plans to release its second quarter 2025 earnings on August 1, 2025, before the market opens [1] - A webcast with a slide presentation will be hosted at 8:00 a.m. Eastern Time on the same day [1] - Participants in the conference call must pre-register to receive the dial-in number and personal PIN for the Q&A session [2] Group 2 - A recording of the webcast and the slide presentation will be available on the company's investor website immediately after the conference call and will remain accessible for one year [3] - Avient Corporation focuses on being an innovator of materials solutions, aiming to help customers succeed while promoting sustainability [4] - The company employs over 9,000 employees globally, leveraging their collective strength to innovate solutions that address customer challenges and capitalize on market opportunities [4]

Group 1 - Avient Corporation has appointed Dr. Ashish K. Khandpur as Chairman of the Board, in addition to his roles as President and CEO, effective May 14, 2025 [1] - Dr. Khandpur's leadership is expected to drive long-term value creation and organic growth for Avient, as noted by the outgoing Chairman Richard H. Fearon [2] - The company aims to amplify innovation and achieve margin expansion under Dr. Khandpur's new strategy [2] Group 2 - Dr. Khandpur has a robust background, having started his career at 3M in 1995 and holding various leadership roles, including Chief Technology Officer and Group President of significant business units [3] - He has overseen substantial R&D investments, with nearly $1.9 billion annually during his tenure at 3M [3] - Avient Corporation focuses on being an innovator of materials solutions, with a diverse portfolio that includes colorants, advanced composites, and engineered materials [4]

Financial Performance - Sales decreased by $2.4 million, or 0.3%, to $826.6 million for the three months ended March 31, 2025, with unfavorable foreign currency impacts of 2.1%[65] - Gross margin as a percentage of sales was 31.8% for the three months ended March 31, 2025, down from 33.6% in the same period of 2024, primarily due to higher restructuring charges of $7.7 million[66] - Selling and administrative expenses increased by $78.3 million, driven by a $71.6 million impairment charge related to the cloud-based ERP system[67] - Operating income plummeted to $0.7 million, a decrease of $93.3 million or 99.3%, compared to $94.0 million in the prior year[64] - Net loss attributable to Avient common shareholders was $20.2 million, compared to net income of $49.4 million in the prior year, marking a decrease of $69.6 million or 140.9%[64] Cash and Debt Management - As of March 31, 2025, cash and cash equivalents totaled $456.0 million, down from $544.5 million at the end of 2024[81] - The company expects to meet cash requirements for 2025 through cash on hand, cash from operations, and available liquidity under its revolving credit facility[82] - Total debt maturities amount to $2,099.2 million, with a significant portion due in 2029[87] - The company was in compliance with all financial and restrictive covenants related to its debt as of March 31, 2025[88] Risks and Uncertainties - The company emphasizes that forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from projections[92] - There are no material changes to exposures to market risk as reported in the Annual Report for the year ended December 31, 2024[95] - The company highlights potential disruptions in credit markets that could impact the availability and cost of credit in the future[94] - Currency fluctuations and political risks may affect foreign operations, impacting overall performance[94] - The company faces risks related to supply chain disruptions and inefficiencies that could affect operations[94] - Changes in laws and regulations, particularly regarding plastics and climate change, could impact business operations[94] - The company is monitoring fluctuations in raw material prices and energy supply, which could affect production costs[94] - There are concerns regarding the ability to pay regular quarterly cash dividends and the timing of future dividends[94] - Cybersecurity threats and information systems failures pose risks to operational integrity[94] - The company acknowledges that external factors, such as geopolitical conflicts and economic conditions, could impact business performance[94] Segment Performance - The Color, Additives and Inks segment saw a sales increase of $4.4 million, or 0.9%, while the Specialty Engineered Materials segment experienced a sales decline of $6.0 million, or 1.9%[73][77]

Core Insights - Avient reported revenue of $826.6 million for the quarter ended March 2025, a decrease of 0.3% year-over-year, with EPS remaining unchanged at $0.76 [1] - The revenue fell short of the Zacks Consensus Estimate of $833.46 million, resulting in a surprise of -0.82%, while the EPS exceeded the consensus estimate of $0.75 by 1.33% [1] Financial Performance Metrics - Specialty Engineered Materials sales were $308.40 million, below the average estimate of $312.56 million, reflecting a year-over-year decline of 1.9% [4] - Color, Additives and Inks sales reached $519.70 million, slightly below the average estimate of $521.10 million, with a year-over-year increase of 0.9% [4] - Corporate sales reported a loss of -$1.50 million, worse than the average estimate of -$0.80 million, marking a significant year-over-year change of +114.3% [4] Operating Income Analysis - Operating income for Color, Additives and Inks was $78.60 million, slightly above the average estimate of $78.01 million [4] - Operating income for Specialty Engineered Materials was $47.10 million, below the average estimate of $49.71 million [4] - Corporate operating loss was -$125 million, significantly worse than the average estimate of -$32.27 million [4] Stock Performance - Avient's shares have returned +13.9% over the past month, outperforming the Zacks S&P 500 composite's +11.5% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Financial Data and Key Metrics Changes - The company reported organic sales growth of 2% in Q1 2025, with adjusted EBITDA increasing by 4% excluding foreign exchange impacts [7][8] - Adjusted EBITDA margins expanded by 20 basis points to 17.5%, despite strong comparisons from the previous year [8] - Adjusted EPS was $0.76, representing a 4% growth when excluding unfavorable foreign exchange impacts [8][15] Business Line Data and Key Metrics Changes - The Color, Additives, and Ink segment saw organic sales growth of 3% and adjusted EBITDA growth of 7%, driven by resilient demand in personal care and food and beverage applications [15][16] - The Specialty Engineered Materials segment's organic sales were flat year-over-year, with adjusted EBITDA declining by 4% due to lower sales in transportation and defense markets [16][17] - The healthcare segment experienced double-digit growth, particularly in medical devices and medical supplies [16] Market Data and Key Metrics Changes - Organic sales in the U.S. and Canada declined by 3%, primarily due to weak demand in consumer and transportation end markets [9] - EMEA region grew by 2%, marking the fourth consecutive quarter of organic growth [9] - Asia reported a 9% increase in organic sales, with growth across most end markets, including transportation [10] - Latin America outpaced market growth with a 17% increase in organic sales, continuing a trend of double-digit growth [10] Company Strategy and Development Direction - The company is focused on cost control and productivity, expecting approximately $30 million in savings from initiatives in 2025 [12] - There is a strategic emphasis on maximizing cash flow and reducing debt, with plans to pay down $100 million to $200 million in debt this year [13][23] - The company aims to prioritize investments in growth vectors, particularly in healthcare and defense, which are expected to outperform the broader market [14][20] Management's Comments on Operating Environment and Future Outlook - Management noted that evolving trade policies have led to uncertainty impacting demand in select markets, particularly in the U.S. [8][20] - The company expects second quarter adjusted EPS of $0.79, representing a 4% growth over the prior year quarter [20] - For the full year, the company models different scenarios, with the low end reflecting flat demand and the high end assuming mid-single-digit growth [22] Other Important Information - The company expects minimal direct impact from tariffs, as most raw materials are sourced and products manufactured locally [19] - The company anticipates 1% to 2% inflation in raw material costs for the full year, with specific trends noted in various materials [84] Q&A Session Summary Question: Defense business outlook after a 5% decline in Q1 - Management expects double-digit growth in the defense business for the first half of the year and high single-digit growth for the full year [27] Question: Transportation market outlook and order books - Transportation is expected to see low negative mid-single-digit growth in the first half, aligning with build rate drops in Europe and the U.S. [28][30] Question: Consumer market weakness in Q1 - The consumer market showed double-digit declines in the U.S. and Canada, with expectations for continued weakness in Q2 [33][34] Question: Share gains in EMEA - Strong performance in healthcare, consumer, and defense markets contributed to share gains in EMEA [35] Question: Packaging segment performance - The packaging segment is driven by strong demand in personal care and beverages, with double-digit growth in personal care applications [39][40] Question: Raw material trends and inflation - The company expects 1% to 2% inflation in raw material costs for the full year, with specific materials trending up or down [84][85]

Company Performance - Avient reported quarterly earnings of $0.76 per share, surpassing the Zacks Consensus Estimate of $0.75 per share, and matching the earnings from a year ago [1] - The company posted revenues of $826.6 million for the quarter ended March 2025, which was 0.82% below the Zacks Consensus Estimate and a slight decrease from $829 million year-over-year [2] - Over the last four quarters, Avient has exceeded consensus EPS estimates four times and topped revenue estimates twice [2] Stock Outlook - Avient shares have declined approximately 16.8% since the beginning of the year, compared to a 3.9% decline in the S&P 500 [3] - The current consensus EPS estimate for the upcoming quarter is $0.79, with expected revenues of $856.72 million, and for the current fiscal year, the estimate is $2.77 on $3.27 billion in revenues [7] Industry Context - The Chemical - Diversified industry, to which Avient belongs, is currently ranked in the bottom 18% of over 250 Zacks industries, indicating potential challenges ahead [8] - The performance of Avient's stock may be influenced by the overall outlook for the industry, as historical data shows that the top 50% of Zacks-ranked industries outperform the bottom 50% by more than 2 to 1 [8]

Financial Data and Key Metrics Changes - The company reported organic sales growth of 2% in the quarter, with adjusted EBITDA growing by 4% excluding foreign exchange impacts [6][14] - Adjusted EBITDA margins expanded by 20 basis points to 17.5%, despite strong comparisons from the previous year [7] - Adjusted EPS was $0.76, representing a 4% growth when excluding unfavorable foreign exchange impacts [7][14] Business Line Data and Key Metrics Changes - The Color, Additives, and Ink segment saw organic sales growth of 3% and adjusted EBITDA growth of 7% [14] - The Specialty Engineered Materials segment's organic sales were flat year-over-year, with adjusted EBITDA declining by 4% [15] - The healthcare segment experienced double-digit growth, driven by demand in medical devices and supplies [15][16] Market Data and Key Metrics Changes - Organic sales in the U.S. and Canada declined by 3%, primarily due to weak demand in consumer and transportation markets [8] - EMEA region grew by 2%, marking the fourth consecutive quarter of organic growth [8] - Asia's organic sales increased by 9%, with growth across most end markets, particularly transportation [9] - Latin America outpaced market growth with a 17% increase in organic sales, marking the fourth consecutive quarter of double-digit growth [9] Company Strategy and Development Direction - The company is focused on cost control and productivity, expecting approximately $30 million in savings from initiatives in 2025 [11] - There is a strategic emphasis on maximizing cash flow and reducing debt by $100 million to $200 million this year [12][22] - The company aims to prioritize investments in growth vectors, particularly in healthcare and defense, which are expected to outperform the broader market [13][20] Management's Comments on Operating Environment and Future Outlook - Management noted that evolving trade policies have led to uncertainty impacting demand in select markets, particularly in the U.S. [7][19] - For Q2, the company expects adjusted EPS of $0.79, representing a 4% growth over the prior year [20] - The full-year guidance for adjusted EBITDA remains unchanged at $540 million to $570 million, with adjusted EPS guidance of $2.70 to $2.94 [22] Other Important Information - The company expects minimal direct impact from tariffs, as most raw materials are sourced and manufactured locally [12][18] - There is a focus on innovation and reformulation to mitigate tariff impacts and enhance customer offerings [53][54] Q&A Session Summary Question: Defense business expectations for the rest of the year - Management expects double-digit growth in the first half and high single-digit growth for the full year in the defense sector, despite a 5% decline in Q1 [26][27] Question: Transportation market outlook - Transportation is expected to see low negative mid-single-digit growth in the first half, aligning with build rate drops, but a potential recovery in the second half is anticipated [28][29] Question: Consumer market weakness - The consumer market showed double-digit declines in the U.S. and Canada, with expectations for continued weakness in Q2 [32][34] Question: Share gains in EMEA - Strong performance in healthcare, consumer, and defense markets contributed to share gains in EMEA, with notable wins in energy infrastructure [35] Question: Packaging segment performance - The packaging segment is driven by strong demand in personal care and beverages, with double-digit growth in personal care applications [39][40] Question: Raw material trends and inflation - The company expects 1% to 2% inflation for the full year, with specific raw materials showing varied trends [84][85] Question: Cash flow and incentive payouts - The cash flow statement reflects a $53 million use of cash related to incentive accruals, primarily from Q1 payouts [80][81]