icon
icon
icon
icon
Upgrade
icon

Huntsman Corp's Q3 2024 Earnings: A Deep Dive into Segment Performance

AInvestWednesday, Nov 6, 2024 3:56 am ET
2min read
Huntsman Corporation (HUN) recently reported its third-quarter 2024 earnings, providing valuable insights into the company's performance and strategic initiatives. Despite a challenging macroeconomic environment, Huntsman demonstrated resilience and growth in certain segments, highlighting its potential as an investment opportunity.

**Segment Performance Analysis**

Huntsman's Polyurethanes segment witnessed a 5% increase in sales volumes, driven by improved demand and share gains in specific markets. However, lower MDI average selling prices partially offset this growth. The segment's adjusted EBITDA decreased due to lower MDI average selling prices and lower equity earnings from a minority-owned joint venture in China. Despite these factors, the segment's performance contributed positively to the company's overall revenue growth.


The Performance Products segment also contributed significantly to Huntsman's revenue growth, with a 5% year-over-year increase in revenues. Higher sales volumes, particularly in fuels and lubes, coatings, and adhesives markets, drove this growth. Although lower average selling prices partially offset this growth, the segment's adjusted EBITDA decreased primarily due to lower average selling prices and unfavorable sales mix. Higher sales volumes and lower fixed costs partially offset this decline, demonstrating the segment's resilience.


The Advanced Materials segment, however, experienced a decrease in revenues compared to the same period in 2023. Lower average selling prices, primarily due to unfavorable sales mix, led to this decline. Despite higher sales volumes, the segment's revenues fell by 5% year-over-year, with average selling prices decreasing by 3% and sales volumes increasing by 2%.

**Strategic Initiatives and Financial Strength**

Huntsman implemented strategic initiatives to improve its cost position and balance sheet strength, contributing to revenue growth. The company successfully placed $350 million of senior notes due 2034, with a 5.7% coupon rate, using the proceeds for general corporate purposes, including debt repayment. This bond offering demonstrated the long-term strength of Huntsman's portfolio and anticipation of market improvements. Additionally, the company focused on improving its cost position by reducing fixed costs and optimizing sales volumes, as evident in the Polyurethanes and Performance Products segments.


Huntsman's net cash provided by operating activities from continuing operations was $134 million, indicating a robust cash flow generation. Additionally, the company's free cash flow from continuing operations was $93 million, demonstrating its ability to generate positive cash flow even after capital expenditures. These financial metrics suggest that Huntsman's strategic initiatives have had a positive impact on its balance sheet and liquidity position.

**Conclusion**

Huntsman Corporation's Q3 2024 earnings call provided valuable insights into the company's segment performance and strategic initiatives. Despite challenges in certain segments, Huntsman demonstrated resilience and growth in others, highlighting its potential as an investment opportunity. The company's focus on improving its cost position, optimizing sales volumes, and strengthening its balance sheet underscores its commitment to long-term success. As the global economy continues to evolve, Huntsman's diverse portfolio and strategic positioning may offer investors a compelling opportunity for growth and value creation.
Disclaimer: the above is a summary showing certain market information. AInvest is not responsible for any data errors, omissions or other information that may be displayed incorrectly as the data is derived from a third party source. Communications displaying market prices, data and other information available in this post are meant for informational purposes only and are not intended as an offer or solicitation for the purchase or sale of any security. Please do your own research when investing. All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. Keep in mind that while diversification may help spread risk, it does not assure a profit, or protect against loss in a down market.