11.03.23
Avient Corporation announced its third quarter 2023 results. The company reported third quarter sales of $754 million compared to $823 million in the prior year. Third quarter GAAP and adjusted earnings per share (EPS) were $0.06 and $0.57, respectively, compared to ($0.30) and $0.59 in the prior year.
"Adjusted EPS for the third quarter of $0.57 was slightly ahead of our guidance of $0.56," said Robert M. Patterson, chairman, president, and CEO, Avient Corporation. “Versus our projections, lower depreciation expense, related to prior restructuring actions, and reduced interest expense more than offset the impact of lower sales."
The company noted that during the third quarter certain end markets continued to perform relatively well, such as energy, transportation and defense, whereas demand in most other markets remained weak versus the prior year.
Commenting on the company's outlook, Patterson said, "We are not seeing a recovery in demand as we had initially modeled for the fourth quarter, but we are encouraged that the pace of destocking has slowed and appears to be nearing an end in many end markets including packaging, which is our largest.
"We have updated our full year sales and adjusted EPS guidance to $3.13 billion and $2.30, respectively, to reflect our current projections as well as weaker foreign exchange. For the fourth quarter, our adjusted EPS guidance of $0.47 represents a 12% increase versus the prior year, much of which comes from Europe where margin expansion is now more than offsetting weak demand conditions," Patterson added. "This is a positive turn in earnings momentum as we look ahead to next year."
The company also noted that it had paid down $100 million of debt and refinanced its term loan during the third quarter, reducing the interest rate and extending certain maturities from 2026 to 2029. The refinancing and debt reduction will result in $10 million of annual interest expense savings.
"We continue to generate strong cash flow from operations and are maintaining our full year free cash flow guidance of $180 million. Given our cash position, we paid down $100 million of debt during the quarter, which brings our total debt reduction to $300 million since we financed the acquisition of Dyneema last year," said Jamie A. Beggs, SVP and CFO, Avient Corporation.
"Adjusted EPS for the third quarter of $0.57 was slightly ahead of our guidance of $0.56," said Robert M. Patterson, chairman, president, and CEO, Avient Corporation. “Versus our projections, lower depreciation expense, related to prior restructuring actions, and reduced interest expense more than offset the impact of lower sales."
The company noted that during the third quarter certain end markets continued to perform relatively well, such as energy, transportation and defense, whereas demand in most other markets remained weak versus the prior year.
Commenting on the company's outlook, Patterson said, "We are not seeing a recovery in demand as we had initially modeled for the fourth quarter, but we are encouraged that the pace of destocking has slowed and appears to be nearing an end in many end markets including packaging, which is our largest.
"We have updated our full year sales and adjusted EPS guidance to $3.13 billion and $2.30, respectively, to reflect our current projections as well as weaker foreign exchange. For the fourth quarter, our adjusted EPS guidance of $0.47 represents a 12% increase versus the prior year, much of which comes from Europe where margin expansion is now more than offsetting weak demand conditions," Patterson added. "This is a positive turn in earnings momentum as we look ahead to next year."
The company also noted that it had paid down $100 million of debt and refinanced its term loan during the third quarter, reducing the interest rate and extending certain maturities from 2026 to 2029. The refinancing and debt reduction will result in $10 million of annual interest expense savings.
"We continue to generate strong cash flow from operations and are maintaining our full year free cash flow guidance of $180 million. Given our cash position, we paid down $100 million of debt during the quarter, which brings our total debt reduction to $300 million since we financed the acquisition of Dyneema last year," said Jamie A. Beggs, SVP and CFO, Avient Corporation.