Omnova Solutions (OMN) Misses Q1 EPS by 12c, Revenues Miss

Omnova Solutions (NYSE: OMN) reported Q1 EPS of ($0.06), $0.12 worse than the analyst estimate of $0.06. Revenue for the quarter came in at $168.9 million versus the consensus estimate of $185 million.

"We remain confident that our specialization strategy will continue to drive long-term shareholder value. Despite widespread market and industry uncertainty, we recorded our ninth consecutive quarter of volume growth year-over-year in Specialty Solutions. We are pleased with our September 2018 OMNOVA Portugal acquisition, which contributed nicely to specialty coatings volumes and profitability in the quarter. The integration of our OMNOVA Portugal acquisition is continuing as expected with above-plan performance so far this year. Additionally, we saw continued strength in demand for our adhesives & sealants products, where our new proprietary innovation for caulk applications continues to be valued by the market. Our nonwovens business benefited from new wins in non-hygiene applications.

"Our strategic plan to improve margins in the Performance Materials segment remains on track, with progress in several areas during the quarter. The coated fabrics business began shipments of new, high-margin products to a new transportation customer, which should begin to benefit margins during the second quarter. In the tire cord business, we saw margins begin to expand. Additionally, the previously announced closure of our Green Bay, Wisconsin facility remains on track. This action will contribute approximately $7-8 million to operating profit on an annualized basis, primarily benefiting the Performance Materials segment, starting in the third quarter of 2019.

"We are optimistic as we head into the second quarter. In Oil & Gas, we have closed on a significant new business opportunity, and have added additional shifts in two plants to support the record order book. We expect to continue benefiting from new customer wins in nonwovens and the strength of our innovative products in adhesives & sealants. In coatings, our March order book rebounded significantly from the first quarter. Customers are beginning to show signs of confidence heading into the coatings season, but we continue to watch for signs of coatings market volatility. If these positive trends continue, we are optimistic that we can deliver Adjusted Diluted Earnings Per Share for 2019 that is higher than 2018's result," finished Noonan.

For earnings history and earnings-related data on Omnova Solutions (OMN) click here.

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