Huntsman’s Q3 2018 Earnings Top Estimates, but Its Stock Tumbles

Huntsman’s third-quarter revenue

Huntsman (HUN) reported third-quarter revenue of $2.44 billion on October 30, reflecting a rise of ~12.7% over its revenue of $2.17 billion in the third quarter of 2017. The company easily beat analysts’ consensus expectation of $2.25 billion. Its revenue growth has been driven by higher volumes and higher selling prices.

All four of Huntsman’s reporting segments saw revenue rises in the third quarter, signifying a halt in the decline of the company’s third-quarter revenues, which have been falling for three consecutive years.

Huntsman’s Q3 2018 Earnings Top Estimates, but Its Stock Tumbles

Third-quarter adjusted EPS

HUN reported adjusted EPS of $0.84, a whopping ~25.4% rise YoY (year-over-year). In the third quarter of 2017, HUN reported adjusted EPS of $0.67. It also beat analysts’ consensus EPS estimate of $0.84. HUN’s adjusted EPS rise was primarily driven by revenue growth, a lower effective tax rate, and share buybacks.

During the third quarter, Huntsman bought back 1.3 million shares, spending ~$37 million. At the end of the third quarter, HUN’s common outstanding shares stood at 241 million compared to 244 million in the third quarter of 2017.

Peter R. Huntsman, chair, president, and CEO of Huntsman, said, “This was a solid quarter overall for our Company, which demonstrated the consistency of our downstream and differentiated businesses. Expected adjustments to short term fundamentals in component MDI provided us an opportunity to show the strength of our unique downstream urethanes portfolio and strategy.”

Stock in the red

Though HUN’s adjusted EPS have risen compared to last year, on a reporting basis, HUN saw net EPS of -$0.05 in the third quarter. As a result, HUN’s stock price has fallen 4.8% as of the time of writing this article. Peer Westlake Chemical (WLK) has fallen 1.3%, Eastman Chemical (EMN) has risen 0.5%, and Celanese (CE) is trading flat.

Investors can indirectly hold Huntsman by investing in the First Trust Materials AlphaDEX ETF (FXZ), which has invested 2.3% of its portfolio in Huntsman as of October 29.