Earnings Review and Free Research Report: Schulman’s Revenue Grew on a Y-o-Y Basis; Exceeded Expectations

LONDON, UK / ACCESSWIRE / July 10, 2017 / Pro-Trader Daily has just published a free post-earnings coverage on A. Schulman, Inc. (NASDAQ: SHLM), which can be viewed by registering at http://protraderdaily.com/optin/?symbol=SHLM, following the Company’s reporting of its third quarter fiscal 2017 earnings results on June 28, 2017. The supplier of plastic compounds and resins delivered its Q1 of organic sales gains in two-and-a-half years, excluding the impact of foreign currency and acquisitions and reiterated its guidance for FY17, excluding currency impact. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member’s account at:

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Earnings Reviewed

Schulman’s consolidated net sales for Q3 fiscal 2017 were $645.8 million compared with $650.4 million in Q3 FY16. Excluding the negative impact of foreign currency translation in the reported quarter of $16.3 million, the Company’s net sales rose 1.8% on a y-o-y basis. Schulman’s revenue numbers surpassed analysts’ expectations of $619.54 million.

During Q3 FY17, Schulman’s adjusted gross profit totaled $99 million, down $14 million, or 13%, on a y-o-y basis, driven by lower volume and higher plant costs stemming from the complex consolidation efforts at its Evansville facility in US and Canada as well as shortfalls of sales in EMEA in April. The Company’s gross margin was 15.3% in the reported quarter compared with 17.4% in the year-ago same period.

Schulman’s GAAP operating income in Q3 FY17 was $32.2 million compared with $31.6 million in Q3 FY16. The Company’s adjusted operating income margin was 5.7% in the reported quarter compared with 7% in the prior year’s same quarter. On a YTD basis, Schulman’s adjusted operating margin was 5.5% in Q3 FY17 compared with 5.9% in Q3 FY16. The Company’s reported quarter adjusted EBITDA was $56 million compared with $66.9 million in the prior year’s corresponding quarter

For Q3 FY17, Schulman posted net income of $13.9 million, or $0.47 per diluted share, compared with net income of $15.5 million, or $0.53 per diluted share, in Q3 FY16. On an adjusted basis, the Company’s net income for the reported quarter was $18.5 million, or $0.63 per diluted share, compared with $25.2 million, or $0.79 per diluted share, in the prior year’s same period. Schulman’s Q3 FY17 adjusted earnings per diluted share of $0.63 includes the negative effect of foreign currency of $0.04 over the prior year’s comparable period. The Company’s earnings numbers fell short of Wall Street’s expectations of $0.65 per share.

Cash Matter

Schulman’s cash provided from operations was $73.6 million in the nine months ended May 31, 2017. During the reported quarter, the Company reduced its net debt position by $20.3 million to a balance of $880.4 million as of May 31, 2017. Schulman’s net leverage at the end of Q3 FY17 was 4.13x.

Outlook

Schulman stated that if the dollar stays at the end-of-May level for the duration of the fourth quarter this would further impact the Company’s earnings by as much as $0.02 per share in Q4 FY17 and would result in $0.12 per share for currency impact compared with the Company’s guidance for the full fiscal year. Excluding the potential 2017 currency translation, Schulman reiterated its initial fiscal 2017 guidance of $2.5 billion to $2.6 billion in sales, adjusted EBITDA of $225 million to $230 million, adjusted earnings per diluted share in the range of $2.08 to $2.18 on an operating basis. The Company expects to achieve a return on invested capital of 11% to 12.5% in FY17.

Stock Performance

On Friday, July 07, 2017, the stock closed the trading session at $30.60, rising 1.32% from its previous closing price of $30.20. A total volume of 143.56 thousand shares has exchanged hands. A. Schulman’s stock price surged 5.70% in the last one month, 0.82% in the past three months, and 22.40% in the previous twelve months. The stock has a dividend yield of 2.68% and currently has a market cap of $928.40 million.

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