Core Insights - Element Solutions Inc. (ESI) reported earnings of 23 cents per share from continuing operations in Q4 2024, down from 32 cents in the same quarter last year, with adjusted earnings per share meeting the Zacks Consensus Estimate of 35 cents [1][2] Financial Performance - The company generated net sales of $624.2 million in Q4 2024, reflecting an 8.9% year-over-year increase and surpassing the Zacks Consensus Estimate of $603.9 million [2] - Adjusted EBITDA grew by 8% in the quarter [2] - For the full year 2024, earnings from continuing operations were $1 per share, up from 48 cents a year ago, with net sales increasing approximately 5.3% year over year to $2,456.9 million [4] Segment Performance - In the Electronics segment, net sales rose 14% year over year to $401.4 million, with organic net sales up 7%, exceeding the consensus estimate of $388.8 million [3] - The Industrial & Specialty segment saw net sales increase by 1% year over year to $222.8 million, with organic net sales up 3%, also above the consensus estimate of $214.9 million [3] Financial Position - ESI ended 2024 with cash and cash equivalents of $359.4 million, a 24.2% increase year over year, while long-term debt decreased by 5.6% to $1,813.6 million [5] - Cash from operating activities was $362 million in 2024, with free cash flow amounting to $294 million for the year [5] Outlook - For FY 2025, ESI expects adjusted EBITDA to be in the range of $520-$540 million and free cash flow conversion to be comparable year over year, with Q1 2025 adjusted EBITDA projected at approximately $125 million [6] Stock Performance - ESI's shares have gained 13.4% over the past year, contrasting with a 20.6% decline in the industry [7]

Sales Performance - In 2024, the company achieved sales of $2.46 billion, with the Electronics segment contributing approximately 64% and the Industrial & Specialty segment contributing approximately 36%[26]. - The Electronics segment's Assembly Solutions accounted for approximately 50% of its 2024 net sales, driven by increasing electronics usage across various markets[30]. - The Circuitry Solutions business represented approximately 30% of the Electronics segment's 2024 net sales, with growth expected from demand in wireless mobile devices and high-performance computing[31]. - The Semiconductor Solutions business contributed approximately 20% of the Electronics segment's 2024 net sales, with growth anticipated from advanced electronics packaging and artificial intelligence applications[32]. - The Industrial & Specialty segment's Industrial Solutions accounted for approximately 75% of its 2024 net sales, with growth driven by increased automobile production and economic growth[36]. - The Graphics Solutions business represented approximately 16% of the Industrial & Specialty segment's 2024 net sales, with growth expected from consumer demand for package imaging technologies[37]. Strategic Initiatives - The company entered into an agreement to sell its flexographic printing plate business for approximately $325 million, expected to close in Q1 2025[25]. - The company aims to pursue targeted acquisitions to strengthen its current businesses and expand product offerings[24]. - The company focuses on operational excellence and prudent capital allocation to drive long-term shareholder value[23]. - The company emphasizes customer-centric innovation to maintain market positions and drive profitable growth[22]. Research and Development - Research and development expenses totaled $63.0 million in 2024, including $3.9 million related to the Kuprion Acquisition[59]. - Approximately 40% of the company's over 5,300 full-time employees are research and development chemists and technical personnel[51]. - The company maintains an extensive intellectual property portfolio with approximately 2,900 domestic and foreign patents as of December 31, 2024[68]. - The company focuses on customer-driven innovation, developing new products based on customer needs and market opportunities[5]. Employee Safety and Culture - The company reduced lost time injury (LTI) rate by nearly 13% in 2024, demonstrating a commitment to employee safety[52]. - The company emphasizes a performance-driven culture with decentralized decision-making to enhance responsiveness to customer needs[50]. - The company operates a large number of small and medium-sized facilities close to customers, enabling efficient supply chain management[45]. - The company aims to increase gender diversity at the management level globally by 2027 as part of its diversity, equity, and inclusion initiatives[53]. Sustainability and Compliance - The company collaborates with governments, industry groups, and universities to develop sustainable solutions that meet environmental standards[43]. - The company is focused on developing sustainable chemistry and processes to align with climate-related regulations[72]. - Compliance with safety, health, and environmental regulations is expected to incur additional costs in the future due to increasing stringency[71]. - The company believes it is in material compliance with applicable environmental laws and regulations[73]. Financial Overview - The company’s business model generates stable, substantial free cash flow, allowing for disciplined capital allocation towards growth and shareholder returns[50]. - Total debt as of December 31, 2024, is $1.82 billion, including approximately $1.04 billion of variable interest rate debt[238]. - The company has a net interest rate of approximately 3.0% on term loans B-3 due to interest rate swaps[239]. - Approximately 77% of net sales in 2024 were generated outside of the U.S., exposing the company to foreign currency risk[241]. - The aggregate U.S. dollar notional amount of foreign currency forward contracts totaled $104 million, with a fair value of $0.9 million net current asset[242]. - The company has $55.3 million in metals futures contracts, with a fair value of $3.2 million net current asset[245]. - The company actively assesses foreign exchange risk exposure and may enter into hedges to mitigate such risks[242]. - Strategic sourcing initiatives are in place to mitigate commodity price risk, with some agreements allowing for cost pass-through to customers[244].

Financial Data and Key Metrics Changes - Adjusted EBITDA for 2024 reached a record $535 million, reflecting a 13% increase in constant currency [9][25] - Free cash flow also set a record at $294 million, marking the fifth year in the past six with over 50% conversion of adjusted EBITDA to free cash flow [9][38] - Organic sales grew 4% for the full year, with adjusted EBITDA margins improving by 120 basis points on a constant currency basis [23][25] Business Line Data and Key Metrics Changes - Semiconductor solutions experienced a 14% organic growth, driven by improved fab utilization and demand for advanced packaging applications [27][29] - Circuitry solutions grew 12% organically, benefiting from investments in AI and data centers [30] - The assembly solutions business grew 1% organically, with low single-digit improvement in the second half of the year [36] Market Data and Key Metrics Changes - The electronics business grew 7% organically, while the industrial and specialty segment declined by 1% [24] - Demand for advanced packaging solutions is increasing, particularly in AI data centers and electric vehicles [19][30] - The industrial solutions segment saw a 2% organic decline, primarily due to lower commodity price-based surcharges and soft European industrial markets [36] Company Strategy and Development Direction - The company is focusing on high-value niches in the electronics industry, particularly in semiconductor and advanced packaging markets [12][42] - A strategic decision was made to sell McDermott Graphics Solutions for $325 million to enhance the portfolio and focus on higher growth areas [14][16] - The company aims to continue penetrating the fastest growing segments and expects high single-digit organic growth in the electronics segment for 2025 [43][50] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about continued demand growth in high-performance computing and data storage, which should drive product lines related to wafer level and advanced packaging [42] - There are uncertainties in the global industrial production outlook, with potential risks from tariffs impacting demand [46][85] - The company anticipates a $30 million impact from the sale of the graphics business and a $15 million foreign exchange headwind for 2025 [48][49] Other Important Information - The company generated a record $294 million in free cash flow, with a strong balance sheet and net leverage at 2.8 times [38][40] - Capital expenditures were higher than historical averages, with plans to invest in strategic projects supporting long-term growth [39][141] - R&D spending is expected to increase slightly as a percentage of sales, with investments in new labs and technology [150][156] Q&A Session Summary Question: How does the company view its relative performance compared to electronics markets? - The company outperformed the electronics market in 2024, with growth in high-value subsegments driving performance [61][63] Question: What are the expectations for margin expansion this year? - Margin expansion is expected to continue, driven by product mix and ongoing raw material deflation [137] Question: Can you provide insights on the PCB market expectations? - The advanced PCB market is expected to grow faster than trailing edge boards, with the company positioned to outperform [96][98] Question: What is the outlook for the company's business in China? - The company had a good year in China, with expectations for continued growth driven by the electric vehicle market [163][165]

Core Insights - Element Solutions (ESI) reported revenue of $624.2 million for Q4 2024, marking an 8.9% year-over-year increase and exceeding the Zacks Consensus Estimate of $603.87 million by 3.37% [1] - The company's EPS for the quarter was $0.35, up from $0.32 a year ago, aligning with the consensus estimate [1] Financial Performance Metrics - Net Sales in the Industrial & Specialty segment reached $222.80 million, surpassing the average estimate of $214.97 million, reflecting a year-over-year increase of 0.8% [4] - Net Sales in the Electronics segment amounted to $401.40 million, exceeding the average estimate of $388.87 million, with a year-over-year growth of 13.9% [4] - Adjusted EBITDA for the Industrial & Specialty segment was $43.10 million, above the average estimate of $40.60 million [4] - Adjusted EBITDA for the Electronics segment was $86.80 million, slightly below the average estimate of $89.73 million [4] Stock Performance - Over the past month, shares of Element Solutions have returned +0.7%, while the Zacks S&P 500 composite has increased by +4.7% [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

Group 1: Earnings Performance - Element Solutions reported quarterly earnings of $0.35 per share, matching the Zacks Consensus Estimate, and an increase from $0.32 per share a year ago [1] - The company posted revenues of $624.2 million for the quarter ended December 2024, exceeding the Zacks Consensus Estimate by 3.37%, compared to $573.4 million in the same quarter last year [2] - Over the last four quarters, Element Solutions has surpassed consensus EPS estimates three times and topped consensus revenue estimates three times [2] Group 2: Stock Performance and Outlook - Element Solutions shares have increased by approximately 2.8% since the beginning of the year, while the S&P 500 has gained 4% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the next quarter is $0.34 on revenues of $574.8 million, and for the current fiscal year, it is $1.46 on revenues of $2.43 billion [7] Group 3: Industry Context - The Chemical - Specialty industry, to which Element Solutions belongs, is currently ranked in the bottom 21% of over 250 Zacks industries, indicating potential challenges for stock performance [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact investor sentiment [5]

Financial Performance - Net sales for Q4 2024 reached $2.46 billion, a 5% increase from Q4 2023, with organic growth of 4%[5] - Reported net income for Q4 2024 was $245 million, up 107% from $118 million in Q4 2023[5] - Adjusted EBITDA for Q4 2024 was a record $535 million, reflecting an 11% increase year-over-year and a 13% increase on a constant currency basis[5] - For the full year 2024, net sales totaled $2.46 billion, a 5% increase compared to 2023, with organic net sales up 4%[10] - The company reported a GAAP diluted EPS of $1.00 for the full year 2024, compared to $0.48 in 2023[10] - Net income attributable to common stockholders for the year 2024 was $244.2 million, compared to $118.1 million in 2023, representing a 106.5% increase[18] - The company reported a net income of $244.5 million for FY 2024, with Q3 contributing $40.4 million[44] Cash Flow and Capital Management - Cash flows from operating activities for Q4 2024 were $362 million, with record free cash flow of $294 million[5] - Total net cash flows provided by operating activities for FY 2024 were $362.0 million, compared to $333.6 million in FY 2023[23] - Free cash flow for Q4 2024 was $116.4 million, compared to $95.4 million in Q4 2023[47] - Approximately $78.2 million was returned to stockholders in cash dividends for the full year 2024[11] - The company completed a $1.04 billion term loan syndication, reducing interest rates and improving balance sheet flexibility[10] Expenses and Investments - Research and development expenses for the year 2024 were $63.0 million, a decrease from $68.1 million in 2023[18] - Capital expenditures for FY 2024 totaled $68.4 million, compared to $52.7 million in FY 2023[23] - Capital expenditures for the twelve months ended December 31, 2024, totaled $68.4 million, an increase from $52.7 million in 2023, reflecting a growth of 30%[27] - The Company reported a total of $21.7 million in acquisition, divestiture, and integration expenses for FY 2024[44] Balance Sheet and Assets - Total assets decreased to $4,873.9 million in 2024 from $4,974.1 million in 2023[21] - Total liabilities decreased to $2,475.5 million in 2024 from $2,629.8 million in 2023[21] - Cash and cash equivalents increased to $359.4 million in 2024 from $289.3 million in 2023[21] - The company reported a total debt of $1,838.8 million and a cash balance of $359.4 million as of December 31, 2024[26] - The company achieved a total capitalization of $7,697.0 million as of December 31, 2024[26] - The company’s market capitalization stood at $6,217.6 million as of December 31, 2024[26] Segment Performance - Electronics segment net sales increased by 14% to $401.4 million in Q4 2024, while Industrial & Specialty segment sales grew by 1% to $222.8 million[25] - The impact of pass-through metals pricing positively affected Electronics' consolidated results by $23.6 million in Q4 2024[36] Earnings and Margins - Basic earnings per share from continuing operations for Q4 2024 was $0.23, down from $0.32 in Q4 2023[18] - The net income margin for Q4 2024 was 8.8%, down 470 basis points from 13.5% in Q4 2023[25] - Adjusted earnings per share (EPS) for Q4 2024 was $0.35, up from $0.32 in Q4 2023, representing a 9% increase[40] Future Guidance and Expectations - The company expects 2025 adjusted EBITDA guidance in the range of $520 million to $540 million, indicating potential 8% growth excluding non-operational impacts[8] - The anticipated sale of the Graphics business is expected to reduce adjusted EBITDA by approximately $30 million in 2025[3] - The company anticipates first quarter 2025 adjusted EBITDA guidance to be provided on a non-GAAP basis, reflecting ongoing operational performance expectations[30] - The effective tax rate for adjusted EPS was set at 20%, reflecting the company's long-term expectations for taxes on adjusted non-GAAP earnings[38] - The Company expects a non-GAAP effective tax rate of 20% for future periods, benefiting from U.S. tax attribute carryforwards[42] Impairments and Adjustments - The Company recorded a non-cash impairment charge of $80.0 million related to its Graphics Solutions reporting unit in Q3 2023[5] - The Company adjusted for $11.4 million impairment charge on available-for-sale debt securities in Q3 2024[7] - The company reported a goodwill impairment of $80.0 million in 2023, which was not present in 2024[18]

Core Viewpoint - Element Solutions has shown a positive trend in its stock performance, with shares increasing by approximately 3.5% since the last earnings report, outperforming the S&P 500 [1] Financial Performance - In Q3 2024, Element Solutions reported earnings of 17 cents per share, a significant improvement from a loss of 13 cents in the same quarter last year. Adjusted earnings per share were 39 cents, surpassing the Zacks Consensus Estimate of 38 cents [2] - The company generated net sales of $645 million, reflecting a year-over-year increase of 7.6%, and exceeding the Zacks Consensus Estimate of $618.8 million. The adjusted EBITDA margin decreased by 30 basis points to 22.1% [3] Segment Highlights - The Electronics segment saw net sales rise by 14% year over year to $419.1 million, with organic net sales increasing by 9%. This figure exceeded the consensus estimate of $396.9 million [4] - In contrast, the Industrial & Specialty segment experienced a 3% decline in net sales to $225.9 million, with organic net sales remaining flat, but still surpassing the consensus of $221.8 million [4] Financial Position - At the end of the quarter, Element Solutions had cash and cash equivalents of $376 million, a 14% increase year over year. Long-term debt decreased by 5.5% to $1,914.7 million [5] - Cash from operating activities was reported at $98.5 million for the quarter [6] Outlook - The company projects adjusted EBITDA for the full year 2024 to be between $535 million and $540 million, with anticipated free cash flow of $280 million to $300 million [7] Estimate Revisions - There has been a downward trend in estimates revisions over the past two months [8] VGM Scores - Element Solutions currently holds a subpar Growth Score of D, a Momentum Score of C, and a Value Score of D, placing it in the bottom 40% for the value investment strategy. The overall aggregate VGM Score is D [9] Industry Comparison - Element Solutions is part of the Zacks Chemical - Specialty industry. Another player in this sector, Sherwin-Williams, has seen a 9.6% increase in stock price over the past month, with reported revenues of $6.16 billion, reflecting a year-over-year change of +0.8% [11]

Element Solutions Inc. (ESI) recorded third-quarter 2024 earnings (as reported) of 17 cents per share. This compares favorably with a loss of 13 cents in the year-ago quarter. Adjusted earnings per share came in at 39 cents in the quarter, beating the Zacks Consensus Estimate of 38 cents.Find the latest EPS estimates and surprises on Zacks Earnings Calendar.The company generated net sales of $645 million, up 7.6% year over year. The figure beat the Zacks Consensus Estimate of $618.8 million. The adjusted ea ...

Element Solutions (ESI) came out with quarterly earnings of $0.39 per share, beating the Zacks Consensus Estimate of $0.38 per share. This compares to earnings of $0.36 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 2.63%. A quarter ago, it was expected that this specialty chemical and printing products would post earnings of $0.35 per share when it actually produced earnings of $0.36, delivering a surprise of 2.86%.Over the ...

Wall Street analysts expect Element Solutions (ESI) to post quarterly earnings of $0.38 per share in its upcoming report, which indicates a year-over-year increase of 5.6%. Revenues are expected to be $618.75 million, up 3.3% from the year-ago quarter.The consensus EPS estimate for the quarter has undergone a downward revision of 1.4% in the past 30 days, bringing it to its present level. This represents how the covering analysts, as a whole, have reassessed their initial estimates during this timeframe.Bef ...