Axalta Coating Systems Ltd. AXTA posted earnings (as reported) of 33 cents per share in the fourth quarter of 2023 compared to 20 cents in the year-ago quarter.
Excluding one-time items, earnings were 43 cents per share in the reported quarter, up 13% year over year. It was in line with the Zacks Consensus Estimate.
The company’s revenue rose about 5% year over year to $1,297.3 million in the quarter. The top line beat the Zacks Consensus Estimate of $1,282.5 million.
The company benefited from a higher price and mix as well as improved volumes. It saw higher sales across both the Performance Coatings and Mobility Coatings units.
Axalta Coating Systems Ltd. Price, Deal and EPS Surprise
Axalta Coating Systems Ltd. price consensus eps surprise chart | Axalta Coating Systems Ltd. Quote
Segment Review
Sales from the Performance Coatings unit rose about 4% year over year to $849 million in the reported quarter, helped by a price and product mix advantage. It was higher than the consensus estimate of $844 million. Refinish volumes increased slightly year over year while industrial volumes were lower as stable volumes in Europe were more than offset by weak macroeconomic conditions in North America, particularly in construction markets.
The Mobility Coatings unit recorded sales of $449 million in the fourth quarter, about 7% year over year, driven by strong volumes. It was higher than the consensus estimate of $439 million. Volumes rose in all regions in the quarter. Light vehicle volume growth has outpaced global car production, particularly in China.
FY23 results
Earnings for the full year 2023 were $1.21 per share compared with 86 cents per share a year ago. Net sales grew about 6% year over year to $5.2 billion.
Finances
Axalta ended 2023 with cash and cash equivalents of $699.8 million, up 8% year over year. Long-term debt was $3,478.5 million at the end of the year, down 5% year over year.
The company generated cash flow from operations of $286 million in the reported quarter, compared to $246 million in the prior year quarter.
Perspective
The company expects adjusted earnings per share of about 40 cents for the first quarter of 2024. It also sees net sales to be flat year-over-year in the quarter. Adjusted EBITDA is forecast to be approximately $240 million.
For the full year 2024, Axalta forecasts adjusted earnings in the range of $1.80-$1.95 per share. Adjusted EBITDA is forecast to be in the range of $1,010-$1,050 million.
Price Action
Axalta shares have gained 7% in a year, compared to the industry’s increase of 17.9%.
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Zacks Rank and Key Picks
AXTA currently has a Zacks Rank #3 (Hold).
Better ranked stocks worth watching in the basic materials space include, Cameco Corporation CCJ, Carpenter Technology Corporation CRS and Alpha Metallurgical Resources Inc. AMR.
Cameco has projected earnings growth of 326.3% for the current year. The Zacks Consensus Estimate for CCJ’s current year earnings has been revised upward by 31.4% over the past 60 days. The shares have grown about 50% in a year. CCJ currently carries a Zacks Rank #1 (Strong Buy). you can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for Carpenter Technology’s current fiscal year earnings is pegged at $4.00, indicating year-over-year growth of 250.9%. CRS, carrying a Zacks Rank #1, has beaten the Zacks Consensus Estimate in three of the last four quarters while matching it once, with the average earnings surprise being 12.2%. The company’s shares have gained 26% in the past year.
The Zacks Consensus Estimate for Alpha Metallurgical Resources’ current year earnings has been revised upward by 8.8% in the past 60 days. It currently carries a Zacks Rank #1. AMR delivered a trailing four-quarter earnings surprise of about 9.6%, on average. AMR shares are up about 125% in a year.
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