Key Points
-
It posted a 51% year-over-year increase in sales, although this was aided by a recent acquisition.
-
Adjusted net income also grew robustly.
-
Investors considered specialty chemical manufacturer Ecovyst (NYSE:ECVT) to be a special stock on Wednesday. They traded it up after the company published its third-quarter results that morning, and it closed the day more than 2% higher. That trounced the under 0.4% gain of the bellwether S&P 500 index.
Difference makers
For the period, Ecovyst’s sales were just under $309 million, which bettered the year-ago quarter by 51%. However, that total includes sales from Calabrian, a business the company acquired at the end of June.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a “Double Down” signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same “Total Conviction” signal is flashing for a company 1/100th the size of Nvidia. Continue »
Getty Images. Image source: Getty Images.
In terms of profitability, net income not under generally accepted accounting principles (non-GAAP, or adjusted) increased by 18% to over $25 million, or $0.23 per share.
With those results, Ecovyst notched a pair of beats on the consensus analyst estimates. The more convincing one was revenue, as those pundits collectively modeled for under $282 million. Their adjusted earnings per share (EPS) estimate was $0.21, meanwhile.
In its earnings release, Ecovyst attributed its organic growth largely to increased export demand, which boosted sales of both regenerated and virgin sulfuric acid.
Strong and solid demand
As for the proximate future, Ecovyst quoted CEO Kurt Bitting as saying, “Given current refining economics, we anticipate high refinery utilization through year-end, and we expect demand across our portfolio to remain healthy for the rest of the year.”
In line with that bullish forecast, the company raised its guidance for full-year adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to a range of $208 million to $212 million. That’s well above both the previous estimate ($195 million to $207 million) and the pre-Calabrian 2025 result of $172 million.
It isn’t easy to find a thriving company in the specialty chemicals space these days, and it looks as if Ecovyst has hit the sweet spot with its in-demand products. It also seems to be integrating Calabrian smoothly and quickly. With all that, its rosy forecast is fully believable, making it a stock to watch in its sector.
Missed AI’s “Act 1”? Act 2 Could Be 14x Bigger
Most investors think they missed the AI boat because they didn’t buy Nvidia in 2005.
But according to our analysts, we’re only at the end of “Act 1″—the R&D phase. “Act 2” is the global rollout, a massive technology build-out that Google’s CEO says could be more profound than fire or electricity.
While everyone watches the chip designers, one “backbone” company provides the critical technology that Nvidia and AMD literally cannot function without. We’ve detailed this under-the-radar player in our new AI Playbook.
Continue »
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
