Olin (OLN) to Report Q3 Earnings: What's in the Offing?
Olin's (OLN) Q3 performance is likely to have benefited from productivity actions and strong performance in the Winchester business.
Olin Corporation OLN is set to release third-quarter 2021 results after market close on Oct 21. The company’s productivity actions and strong performance in its Winchester business are likely to get reflected in its third-quarter numbers. Benefits associated with cost savings and price hikes are likely to have supported the bottom line. However, it is likely to have faced headwinds stemming from higher raw material costs.
The company beat the Zacks Consensus Estimate for earnings in three of the last four quarters, while missing the same once. It has a trailing four-quarter negative earnings surprise of roughly 0.9%, on average. The company reported an earnings surprise of 19.3% in the last reported quarter.
Olin’s shares have surged 190.6% in the past year compared with a 21.9% rise of the industry.
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Let’s see how things are shaping up for this announcement.
Our proven model predicts an earnings beat for Olin this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat.
Earnings ESP: Earnings ESP for Olin is +7.45%. The Zacks Consensus Estimate for third-quarter earnings is currently pegged at $2.07. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Olin currently flaunts a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
What do the Estimates Say?
The Zacks Consensus Estimate for Olin’s revenues in the to-be-reported quarter is pegged at $2,380 million, which suggests a year-over-year increase of 65.5%.
The consensus mark for net sales in the Chlor Alkali Products and Vinyls unit is currently pegged at $1,053 million for the third quarter, which calls for a 39.5% year-over-year increase.
The Zacks Consensus Estimate for the Winchester segment’s net sales is currently pegged at $408 million that suggests a 98.1% rise from the year-ago quarter’s level. The same for the Epoxy division is pegged at $976 million, which suggests a 105% year-over-year increase.
Factors at Play in Q3
The company is likely to have gained from strong performance of its Winchester business on the back of the Lake City U.S. Army ammunition contract. The multi-year contract is expected to have contributed to sales and profitability in the third quarter.
Productivity actions might have positively contributed to third-quarter performance. The company expects productivity measures like plant closures as well as raw materials and railcar management to deliver $100 million of net savings in 2021.
However, the company is expected to have faced challenges from cost-related headwinds in raw materials. It is likely to have witnessed headwind from higher natural gas prices as well as benzene and propylene costs. Higher commodity costs are likely to have exerted pressure on the margins of the Winchester unit.
Olin Corporation Price and EPS Surprise
Stocks That Warrant a Look
Here are some other companies in the basic materials space you may want to consider as our model shows these also have the right combination of elements to post an earnings beat this quarter:
Nutrien Ltd. NTR, scheduled to release earnings on Nov 1, has an Earnings ESP of +0.77% and sports a Zacks Rank #1.
The Chemours Company CC, scheduled to release earnings on Nov 4, has an Earnings ESP of +5.70% and carries a Zacks Rank #2.
Albemarle Corporation ALB, scheduled to release earnings on Nov 3, has an Earnings ESP of +8.05% and carries a Zacks Rank #3.
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