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

Core Insights - Ashland Global Holdings Inc. reported a loss from continuing operations of $14 million or 30 cents per share for Q1 fiscal 2026, an improvement from a loss of $166 million or $3.51 per share in the same quarter last year [1] - Adjusted earnings were 26 cents per share, slightly down from 28 cents in the prior year, but exceeded the Zacks Consensus Estimate of 23 cents [1] Financial Performance - Sales decreased by 5% year over year to $386 million, missing the Zacks Consensus Estimate of $408.3 million [2] - The decline in sales was attributed to the divestiture of the Avoca business, which reduced revenue by approximately $10 million, and weaker demand in sectors such as coatings, construction, personal care, and industrials, along with modest pricing pressure [2] Segment Performance - Life Sciences segment sales increased by 4% year over year to $139 million, though it fell short of the Zacks Consensus Estimate of $146 million, driven by resilient demand in pharma applications [3] - Personal Care segment sales declined by 8% year over year to $123 million, missing the Zacks Consensus Estimate of $132 million, primarily due to portfolio optimization linked to the Avoca divestiture [4] - Specialty Additives segment sales fell by 11% year over year to $102 million, missing the Zacks Consensus Estimate of $111 million, due to weak demand in coatings in China and increased competition [5] - Intermediates segment sales decreased by 6% year over year to $31 million, slightly beating the consensus estimate of $30.26 million, mainly due to lower pricing across the BDO value chain [6] Financial Position - Cash and cash equivalents at the end of the quarter were $304 million, reflecting a sequential increase of approximately 41.4% [7] - Long-term debt stood at $1,387 million, up roughly 0.2% from the previous quarter [7] Outlook - For fiscal 2026, Ashland anticipates sales between $1.835 billion and $1.905 billion, with adjusted EBITDA projected at $400 million to $420 million [8] - Adjusted EPS is expected to show double-digit growth due to operating improvements and portfolio optimization, with free cash flow conversion targeted at around 50% of adjusted EBITDA and capital expenditure estimated at about $100 million [8]