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]

Q1 2025 Performance - Sales decreased slightly to $827 million, a 0.3% decrease compared to Q1 2024 [9] - Adjusted EBITDA increased by 1.1% to $145 million, with an adjusted EBITDA margin of 17.5% [9] - Adjusted EPS remained flat at $0.76, in line with guidance [9] - Organic sales growth varied by region, with US & Canada down by 3%, Europe, Middle East & Africa up by 2%, Asia up by 9%, and Latin America up by 17% [10] Segment Performance - Color, Additives & Inks sales increased to $520 million from $515 million in Q1 2024, with an adjusted EBITDA margin of 19.3% [15] - Specialty Engineered Materials sales decreased to $308 million from $314 million in Q1 2024, with an adjusted EBITDA margin of 22.2% [18] Financial Guidance for 2025 - The company maintains its full-year 2025 adjusted EBITDA guidance of $540 to $570 million, representing a 4% to 10% growth excluding foreign exchange impacts [26] - Full-year 2025 adjusted EPS guidance is $2.70 to $2.94 [26] - Q2 2025 adjusted EPS is expected to be $0.79 [26] Sales Exposure - Sales exposure is approximately $100 million [23] - Raw materials exposure is approximately $100 million [23]

Core Insights - Avient Corporation reported first quarter sales of $826.6 million, a slight decrease from $829.0 million in the same quarter last year [1][8] - The company experienced a GAAP loss per share of $0.22 compared to earnings of $0.54 in the prior year quarter, primarily due to special items related to an impairment from ceasing the development of a cloud-based ERP system [2][8] - Adjusted EPS remained stable at $0.76, reflecting a 4% growth when excluding the unfavorable impact of foreign exchange [3][8] Financial Performance - First quarter adjusted EBITDA margins expanded by 20 basis points to 17.5%, despite a challenging macroeconomic environment [4] - Organic sales growth was achieved for the fourth consecutive quarter, with notable increases in Asia (9%) and Latin America (17%), while the U.S. and Canada saw a decline of 3% [5][8] - The company maintained its full-year adjusted EBITDA guidance range of $540 to $570 million and adjusted EPS guidance of $2.70 to $2.94 [5][8] Strategic Outlook - The company anticipates continued volatility in demand, particularly in consumer and transportation markets, but sees growth opportunities in packaging and high-profit sectors like defense and healthcare [5][6] - Avient's operational performance aligns with expectations, and the company plans to reduce debt by $100 to $200 million by year-end, supported by a strong cash position [5][6] Special Items and Adjustments - The first quarter results included special items totaling $75.7 million after tax, significantly impacting net income [22][23] - The impairment related to the cloud-based ERP system accounted for a substantial portion of the special items, amounting to $86.3 million [22][23] Segment Performance - Sales from the Color, Additives and Inks segment were $519.7 million, while the Specialty Engineered Materials segment reported $308.4 million [31] - The gross margin for the Color, Additives and Inks segment was $173.1 million, compared to $97.8 million for Specialty Engineered Materials [31]

Financial Performance - First quarter 2025 sales were $826.6 million, a slight decrease of 0.3% compared to $829.0 million in the prior year quarter[2]. - First quarter GAAP EPS was ($0.22), down from $0.54 in the prior year quarter, impacted by special items totaling $0.82 related to an impairment[3][6]. - Adjusted EPS for the first quarter was $0.76, consistent with the prior year quarter, reflecting a 4% growth when excluding the unfavorable impact of foreign exchange[4][6]. - The company achieved 2% organic sales growth in the first quarter, excluding foreign exchange effects[6]. - For the second quarter, the company expects adjusted EPS of $0.79, representing a 4% growth over the prior year quarter[7]. - Full year adjusted EPS guidance remains unchanged at a range of $2.70 to $2.94[6][7]. - For the year ended December 31, 2024, net income attributable to Avient common shareholders was $169.5 million, resulting in an EPS of $1.84[37]. - Adjusted net income for the same period was $244.9 million, with an adjusted EPS of $2.66[37]. - For the three months ended June 30, 2024, net income attributable to Avient common shareholders was $33.6 million, leading to an EPS of $0.36[37]. - Adjusted net income for the second quarter was $70.2 million, with an adjusted EPS of $0.76[37]. Operational Metrics - Adjusted EBITDA margins expanded by 20 basis points to 17.5% in the first quarter[5]. - The adjusted EBITDA for the first quarter of 2025 was $144.7 million, up from $143.1 million in the same period last year, representing an adjusted EBITDA margin of 17.5%[36]. - The gross margin for the first quarter of 2025 was $263.2 million, down from $278.2 million in the first quarter of 2024, with an adjusted gross margin of $270.9 million[36]. - Operating income for the first quarter of 2025 was $0.7 million, significantly lower than $94.0 million in the same quarter of 2024[36]. - The company incurred special items impacting operating income totaling $99.5 million for the first quarter of 2025, compared to $6.2 million in the prior year[36]. Cash Flow and Debt Management - The company plans to pay down $100 to $200 million of debt by year-end, supported by a strong cash position and expected free cash flow[7]. - Cash and cash equivalents decreased to $456.0 million as of March 31, 2025, down from $544.5 million at the end of 2024[28]. - Accounts receivable increased to $489.6 million in the first quarter of 2025, compared to $399.5 million in the previous quarter[28]. - The total assets remained stable at $5,811.2 million as of March 31, 2025, compared to $5,811.1 million at the end of 2024[28]. Expense Management - The company reported a significant increase in selling and administrative expenses, totaling $262.5 million for the first quarter of 2025, compared to $184.2 million in the same period last year[34]. - Special items after-tax for the year totaled $15.9 million, contributing $0.17 to EPS[37]. - Amortization expense after-tax for the year was $59.5 million, impacting EPS by $0.65[37]. - Special items after-tax for the second quarter amounted to $21.8 million, adding $0.24 to EPS[37]. - Amortization expense after-tax for the second quarter was $14.8 million, affecting EPS by $0.16[37]. Market Performance - Organic sales growth was strong in Asia and Latin America, with increases of 9% and 17% respectively, while the U.S. and Canada saw a 3% decline[7]. - The company is focused on executing its strategy to grow organically above market rates while managing costs and enhancing margins[8].

Core Viewpoint - Avient (AVNT) is anticipated to report a year-over-year decline in earnings despite an increase in revenues for the quarter ending March 2025, with the actual results being crucial for its near-term stock price movement [1][2]. Earnings Expectations - The upcoming earnings report is expected to be released on May 6, with a consensus EPS estimate of $0.75 per share, reflecting a year-over-year decrease of 1.3%. Revenues are projected to be $833.46 million, which is a 0.5% increase from the previous year [3]. - The consensus EPS estimate has been revised down by 4.33% over the last 30 days, indicating a bearish sentiment among analysts regarding the company's earnings prospects [4][10]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that the Most Accurate Estimate for Avient is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -1.42%, which complicates the prediction of an earnings beat [10][11]. - A positive Earnings ESP is generally a strong predictor of an earnings beat, especially when combined with a favorable Zacks Rank, but Avient currently holds a Zacks Rank of 3, making it challenging to predict a positive outcome [8][11]. Historical Performance - In the last reported quarter, Avient was expected to post earnings of $0.48 per share but exceeded expectations with actual earnings of $0.49, resulting in a surprise of +2.08%. Over the last four quarters, the company has consistently beaten consensus EPS estimates [12][13]. Conclusion - While Avient does not appear to be a compelling candidate for an earnings beat, it is essential for investors to consider other factors influencing stock performance ahead of the earnings release [16].

Company Overview - Avient (AVNT) shares increased by 13.7% to close at $32.89, following a significant trading volume compared to normal sessions, despite a 28.1% loss over the past four weeks [1] - The upcoming quarterly earnings for Avient are expected to be $0.76 per share, unchanged from the previous year, with revenues projected at $839.69 million, reflecting a 1.3% increase year-over-year [2] Earnings Estimates and Trends - The consensus EPS estimate for Avient has been revised down by 1.2% over the last 30 days, indicating a negative trend in earnings estimate revisions, which typically does not lead to price appreciation [4] - Empirical research suggests that trends in earnings estimate revisions are closely linked to near-term stock price movements, highlighting the importance of monitoring these changes [3] Industry Context - Avient operates within the Zacks Chemical - Diversified industry, which has seen a broader rise in material stocks due to President Trump's decision to pause reciprocal tariffs for 90 days [1] - Another company in the same industry, Dow Inc. (DOW), experienced a 15.7% increase in its stock price, closing at $29.86, despite a significant 29.6% decline over the past month [4] - Dow Inc.'s consensus EPS estimate has dropped by 32% over the past month to $0.04, representing a 92.9% decrease from the previous year's report, and it currently holds a Zacks Rank of 5 (Strong Sell) [5]

Core Viewpoint - Avient Corporation plans to release its first quarter 2025 earnings on May 6, 2025, before the market opens, followed by a webcast presentation [1] Group 1: Earnings Release - The earnings release is scheduled for May 6, 2025, before market opening [1] - A webcast with a slide presentation will take place at 8:00 a.m. Eastern Time on the same day [1] Group 2: Webcast Details - The webcast can be accessed live at avient.com/investors [2] - Participants in the Q&A session must pre-register to receive the dial-in number and personal PIN [2] - A recording of the webcast and slide presentation will be available on the company's website immediately after the conference call and will remain accessible for one year [3] Group 3: Company Overview - Avient Corporation aims to be an innovator of materials solutions that support customer success and sustainability [4] - The company employs over 9,000 individuals globally, fostering collaboration to innovate solutions [4] - Avient's product portfolio includes colorants, advanced composites, functional additives, engineered materials, and Dyneema®, recognized as the world's strongest fiber [4]

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