Specialty chemicals firm Innospec Q3 adjusted EPS misses estimates on gross margins decline

Reuters11-05
Specialty chemicals firm Innospec Q3 adjusted EPS misses estimates on gross margins decline

Overview

  • Innospec Q3 sales slightly beat analyst expectations, reaching $441.9 mln

  • Adjusted EPS for Q3 missed analyst expectations at $1.12

  • Company increased semi-annual dividend by 10% and repurchased $10.7 mln in shares

Outlook

  • Innospec expects sequential operating income growth in Performance Chemicals and Oilfield Services

  • Innospec does not assume resumption of Mexican sales in its outlook

Result Drivers

  • FUEL SPECIALTIES - Strong operating income growth and margin expansion offset weaker results in other segments

  • PERFORMANCE CHEMICALS - Sales grew but gross margins declined due to higher costs and weaker product mix

  • OILFIELD SERVICES - Operating income declined due to lower Middle East activity and customer timing issues

Key Details

Metric

Beat/Miss

Actual

Consensus Estimate

Q3 Sales

Beat

$441.90 mln

$439.63 mln (3 Analysts)

Q3 Adjusted EPS

Miss

$1.12

$1.18 (3 Analysts)

Q3 EPS

$0.52

Q3 Net Income

$12.90 mln

Q3 Gross Profit

$116.70 mln

Q3 Operating Income

$5.90 mln

Q3 Pretax Profit

$11.50 mln

Analyst Coverage

  • The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 3 "strong buy" or "buy", no "hold" and no "sell" or "strong sell"

  • The average consensus recommendation for the specialty chemicals peer group is "buy"

  • Wall Street's median 12-month price target for Innospec Inc is $107.50, about 31.5% above its November 3 closing price of $73.65

  • The stock recently traded at 12 times the next 12-month earnings vs. a P/E of 13 three months ago

Press Release: ID:nGNX4NvMzy

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)

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