Huntsman (HUN) Up 3% Since Last Earnings Report: Can It Continue?

Core Insights - Huntsman reported a net income of $22 million or 13 cents per share for Q2 2024, an increase from $19 million or 11 cents in the same quarter last year, with adjusted earnings per share at 14 cents, surpassing the Zacks Consensus Estimate of 12 cents [2][3] - Revenues for the quarter were $1,574 million, down approximately 1% year-over-year, and missed the Zacks Consensus Estimate of $1,619.9 million [3] Segment Highlights - Polyurethanes: Revenues decreased by 1% year-over-year to $1,001 million, below the estimate of $1,074.2 million, primarily due to lower average selling prices of MDI, although higher sales volume partially offset this decline [4] - Performance Products: Revenues fell by 3% to $299 million, below the estimate of $307.3 million, driven by lower average selling prices due to competitive pressures, despite increased sales volumes from improved industrial activity [5] - Advanced Materials: Revenues dropped by 2% to $279 million, exceeding the estimate of $266.3 million, with increased sales volume in aerospace and infrastructure markets, although impacted by an unfavorable sales mix [6] Financials - Huntsman ended the quarter with cash of $335 million, a decrease of 33% year-over-year, while long-term debt was $1,344 million, down 14% year-over-year [7] - Net cash provided by operating activities was $55 million, with free cash flow from continuing operations at $5 million [7] Outlook - The company experienced a 9% year-over-year increase in sales volumes in Q2 2024 and anticipates continued favorable growth comparisons in the second half of the year, although no significant changes in global economic activity are expected for the remainder of Q3 [8] - Huntsman aims to focus on cost control, cash flow management, and increasing sales volumes compared to 2023 levels, supported by a robust balance sheet and a disciplined capital allocation strategy [9] Estimate Trends - There has been a downward trend in estimates, with the consensus estimate shifting down by 33.6% [10] - Huntsman currently holds a Zacks Rank 3 (Hold), indicating an expectation of an in-line return from the stock in the coming months [12] Industry Performance - Huntsman is part of the Zacks Chemical - Diversified industry, where Eastman Chemical reported a revenue increase of 1.7% year-over-year to $2.36 billion, with an EPS of $2.15 compared to $1.99 a year ago [13] - Eastman Chemical is expected to post earnings of $2.12 per share for the current quarter, reflecting a year-over-year change of +44.2% [14]