Why Ashland stock exploded today

stock Ashland (ash 15.91%) The specialty materials company rose 15.9% on Wednesday after reporting better-than-feared quarterly results and providing positive guidance.

Ashland offers amid improving demand trends

For the first quarter of fiscal 2024, ended December 31, 2023, Ashland’s revenue decreased 10% year-over-year to $473 million and adjusted (non-GAAP) net income was $0.45 per share (down from $0.97 per share a year ago). Converted. . On average, analysts expected adjusted earnings of just $0.19 per share, but revenue was slightly higher at $478 million.

Management noted that market demand dynamics remain roughly consistent, as previously communicated. In particular, it said that year-over-year volume declines have begun to ease and stabilize in most end markets. Ashland’s earnings were boosted by favorable pricing within its life sciences and personal care segments and the repurchase of an additional $100 million of Ashland stock during the quarter.

“We are cautiously optimistic about the improving demand trend we experienced in January with follow-on orders through February, but we continue to carefully manage inventory levels and drive cash generation,” said Ashland CEO Guillermo Novo. Novo added that customer order lead times have normalized to pre-COVID-19 levels.

What’s next for Ashland Investors?

For the second quarter of the current fiscal year, Ashland’s revenue is expected to range from $565 million to $585 million. That’s well above analysts’ consensus estimates of $561 million and adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $115 million to $125 million. million. For full fiscal year 2024, Ashland expects revenue in the range of $2.15 billion to $2.25 billion. That’s once again comfortably ahead of Wall Street’s estimates of $2.16 billion and midpoint, with adjusted EBITDA of $460 million to $500 million.

All in all, this was as solid a quarter as any investor could ask for as Ashland works to return to consistent top-line growth. Stocks are simply reacting in kind.