Olin Corporation (OLN) reported mixed third-quarter financial results, releasing its earnings after the closing bell on Thursday. The company’s earnings per share missed analyst expectations, but revenue exceeded estimates. However, a significant impact from Hurricane Beryl cast a shadow over the otherwise positive results.
The company reported quarterly GAAP losses of 21 cents per share, falling short of the analyst consensus estimate of 3 cents per share. Despite this shortfall, Olin’s quarterly sales came in at $1.59 billion, exceeding the analyst consensus estimate of $1.57 billion.
Ken Lane, President, and Chief Executive Officer, acknowledged the challenges posed by Hurricane Beryl, stating, “During the third quarter, our Olin team worked tirelessly to recover from the effects of Hurricane Beryl. However, despite the team’s hard work, persistent operating limitations related to the hurricane necessitated an additional outage, which we commenced in late September and successfully completed this month.” The hurricane-related downtime added $9.4 million to the originally estimated third-quarter impact of $100 million, and Olin anticipates a residual fourth-quarter impact of approximately $25 million on its Chemicals businesses.
Overall, Hurricane Beryl is expected to result in an approximately $135 million headwind in 2024. Despite these challenges, Olin’s Freeport, Texas assets are now returning to normal operations. Excluding the Hurricane Beryl impact, Olin’s Chemicals businesses’ performance in the third quarter of 2024 was slightly better than anticipated.
Looking ahead, Olin said it sees fourth-quarter adjusted EBITDA of $170 million to $200 million. This optimistic outlook reflects the company’s confidence in its ability to overcome the challenges posed by Hurricane Beryl and return to its normal operating levels.
On Monday, Olin shares gained 1% to trade at $41.85 following the earnings announcement. Analysts have responded to the earnings report by adjusting their price targets for Olin. Keybanc analyst Aleksey Yefremov maintained an Overweight rating for Olin but lowered the price target from $57 to $56. Similarly, Barclays analyst Michael Leithead maintained an Equal-Weight rating for Olin but lowered the price target from $49 to $45.
These adjustments in price targets reflect the analysts’ assessment of the impact of Hurricane Beryl on Olin’s short-term prospects. However, the analysts remain optimistic about Olin’s long-term growth potential, citing its strong market position and strategic focus on key industries. Investors considering buying OLN stock will likely pay close attention to the company’s ability to navigate the challenges posed by Hurricane Beryl and deliver on its long-term growth strategy.
