Axalta’s Earnings Show Strong Growth Despite Currency Challenges
Axalta Coating Systems Ltd. AXTA reported earnings of 63 cents per share for the fourth quarter of 2024, a significant increase from 33 cents during the same period last year.
Excluding one-time items, earnings stood at 60 cents per share, compared to 46 cents a year earlier, marking a notable achievement that also exceeded the Zacks Consensus Estimate of 51 cents.
Discover the latest EPS estimates and surprises on Zacks Earnings Calendar.
The company’s revenue rose about 1% year over year, totaling $1,311 million for the quarter, slightly above the Zacks Consensus Estimate of $1,296.5 million. This figure faced a 1% drag from foreign exchange fluctuations.
Adjusted EBITDA increased by 10% year over year to $275 million. The adjusted EBITDA margin also improved by 170 basis points to 21%.
Review of Axalta’s Business Segments
Sales from the Performance Coatings unit experienced a 1% decline year over year, totaling $843 million this quarter. The decrease was driven by lower volumes and negative currency impacts, outweighing gains from the CoverFlexx acquisition. This result fell short of the consensus estimate of $857 million.
In contrast, the Mobility Coatings segment saw sales rise about 4% year over year to $468 million, supported mainly by strong demand in light vehicle production in China and Latin America, although this positive performance was somewhat tempered by drops in commercial vehicle volumes and currency effects. It exceeded the consensus estimate of $438 million.
Axalta’s Financial Performance in FY24
For the entirety of 2024, earnings reached $1.78 per share, significantly higher than $1.21 per share for the previous year. Net sales increased approximately 2% year over year, totaling $5.3 billion.
Current Financial Snapshot of Axalta
By the end of 2024, Axalta boasted cash and cash equivalents totaling $593 million, a 15% increase from the prior year. The company’s long-term debt amounted to $3,401 million, down roughly 2% year over year.
Cash flow from operations in 2024 was stable, coming in at $576 million, compared to $575 million the previous year.
Future Forecast for Axalta
Axalta projects adjusted earnings per share of approximately 54 cents for the first quarter of 2025, with net sales anticipated to remain flat year-over-year. The company expects adjusted EBITDA to reach around $265 million.
For the full year 2025, adjusted earnings are forecasted in the range of $2.50 to $2.60 per share, while adjusted EBITDA is predicted between $1,150 million and $1,175 million. Net sales are estimated to fall between $5,350 million and $5,400 million.
Axalta’s Market Performance
Over the past year, shares of Axalta have increased by 17.2%, contrasting with a 16.3% decline in the Zacks Chemicals Specialty industry.
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Axalta’s Zacks Rank and Noteworthy Alternatives
Currently, AXTA holds a Zacks Rank #4 (Sell).
Within the Basic Materials sector, several stocks have better ratings, including Ingevity Corporation NGVT, ICL Group Ltd ICL, and Nutrien Ltd. NTR. NGVT is currently rated as a Zacks Rank #1 (Strong Buy), while ICL and NTR are ranked #2 (Buy). For more insights, view today’s Zacks #1 Rank stocks here.
Ingevity will report its fourth-quarter results on Feb. 18, with the Zacks Consensus Estimate for its earnings set at 12 cents. Historically, NGVT has outperformed the Zacks Consensus Estimate in three of the last four quarters, achieving an average four-quarter earnings surprise of 95.4%.
ICL Group is expected to release its fourth-quarter results on Feb. 26, and the consensus estimate for its fourth-quarter earnings is 6 cents, which it has beaten in each of the last four quarters by an average of 18.1%.
Nutrien is slated to announce its fourth-quarter results on Feb. 19, with Zacks estimating its earnings at 33 cents, and it has seen a modest increase of about 5% in the last year.
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