A month has gone by since the last earnings report for Ashland (ASH Quick QuoteASH - Free Report) . Shares have lost about 2.3% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Ashland due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Ashland's Earnings Outpace Estimates, Revenues Miss in Q1

Ashland recorded first-quarter fiscal 2025 adjusted earnings of 28 cents per share, down from 45 cents in the prior-year quarter. The bottom line beat the Zacks Consensus Estimate of 20 cents.

Sales declined 14.4% year over year to $405 million, falling short of the Zacks Consensus Estimate of $433.2 million. Organic sales volume growth in the Personal Care, Specialty Additives and Intermediates segments largely offset lower volumes in Life Sciences.

Segment Highlights

Life Sciences: Sales in the segment fell 33% from the prior year to $134 million in the reported quarter, missing the Zacks Consensus Estimate of $160.8 million. The decline was due to Portfolio Optimization and lower pharmaceutical sales volumes. Lower pharma sales mainly represent weaker market demand and customer inventory control actions, particularly in Europe, the EMEA and lower pricing from reductions implemented in fiscal year 2024.

Personal Care: Sales in the division rose 3.9% year over year to $134 million, in-line with Zacks Consensus Estimate of $133.9 million. The increase was driven by higher sales volumes across skin care, hair care and biofunctionals end markets.

Specialty Additives: Sales in the segment fell 5.7% year over year to $115 million, in line with Zacks Consensus Estimate of $115.3 million. The decrease was mostly due to Portfolio Optimization, which lowered Specialty Additives sales by roughly $7 million. Portfolio optimization mainly includes exiting the low-margin construction business.

Intermediates: Sales in the segment were stable year over year at $33 million, lagging the Zacks Consensus Estimate of $34.3 million. This consistent performance was delivered across both merchant and captive sales.

Financials

Operating activities used $30 million in cash flows in the first quarter. Free cash flow was negative $26 million against $66 million in the previous year. This was due to inventory corrections and reduced variable compensation payouts, which benefited the prior year.

Outlook

For the full fiscal year, sales are expected to be between $1.90 billion and $2.05 billion, while adjusted EBITDA is projected in the range of $430-$470 million.



 

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended downward during the past month.

The consensus estimate has shifted -9.92% due to these changes.

VGM Scores

Currently, Ashland has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Ashland has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.