Ashland Global Holdings Inc. ASH recorded profits from continuing operations of $60 million or $1.09 per share in the fourth quarter of fiscal 2022 (ending Sep 30, 2022), up from $33 million or 55 cents in the prior-year quarter.

Barring one-time items, adjusted earnings came in at $1.46 per share, up from the year-ago quarter’s figure of $1.22. It topped the Zacks Consensus Estimate of $1.39.

Sales rose around 7% year over year to $631 million. It missed the Zacks Consensus Estimate of $636.1 million. The top line was driven mainly by disciplined pricing actions leading to a recovery in costs in a high-inflation environment as well as better product mix, partly offset by unfavorable currency swings. The company witnessed sales growth across its segments in the quarter.

Ashland Inc. Price, Consensus and EPS Surprise

Ashland Inc. price-consensus-eps-surprise-chart | Ashland Inc. Quote

Segment Highlights

Life Sciences: Sales in the segment were up 13% year over year to $213 million in the reported quarter, aided by double-digit growth to pharmaceutical customers reflecting better product mix, cost recovery and strong demand.

Personal Care: Sales in the division rose 3% year over year to $188 million. Sales were supported by strong demand, disciplined pricing and better mix, partly offset by unfavorable currency translation.
 
Specialty Additives: Sales in the segment increased 3% year over year to $187 million, aided by inflation recovery, mix improvements and strong demand.

Intermediates: Sales in the segment went up 7% year over year to $64 million, led by higher merchant-market prices and improved mix.

Fiscal 2022 Results

Profit from continuing operations (as reported) or full-year fiscal 2022 was $3.20 per share, compared with $2.82 per share a year ago. Revenues were $2.4 billion for the fiscal, up around 13% year over year.

Financials

Cash and cash equivalents were $646 million at the end of the quarter, up around 208% year over year. Long-term debt was $1,270 million, down around 20% year over year.

Cash flows from operating activities was $179 million in the reported quarter, up around 19% year over year.

Outlook

Ashland expects sales in the range of $2.5-$2.7 billion for fiscal 2023. It also anticipates adjusted EBITDA between $600 million and $650 million for the fiscal.

Price Performance

Shares of Ashland have gained 7.1% in the past year compared with a 32.4% decline of the industry.

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Zacks Rank & Key Picks

Ashland currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks worth considering in the basic materials space include Albemarle Corporation ALB, Commercial Metals Company CMC and Reliance Steel & Aluminum Co. RS.

Albemarle, currently carrying a Zacks Rank #2 (Buy), has a projected earnings growth rate of 420.3% for the current year. The Zacks Consensus Estimate for ALB's current-year earnings has been revised 5.8% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Albemarle’s earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 24.2%, on average. ALB has gained around 18% in a year.

Commercial Metals currently carries a Zacks Rank #2. The Zacks Consensus Estimate for CMC's current-year earnings has been revised 3.8% upward in the past 60 days.

Commercial Metals’ earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 19.7%, on average. CMC has gained around 38% in a year.

Reliance Steel, currently carrying a Zacks Rank #2, has a projected earnings growth rate of 29.7% for the current year. The Zacks Consensus Estimate for RS's current-year earnings has been revised 0.1% upward in the past 60 days.

Reliance Steel’s earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 13.6%, on average. RS has gained around 25% in a year.

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