Trinseo (TSE) Misses Q4 EPS by 13c, Revenues Miss; Offers FY20 EPS Guidance Below Consensus

Trinseo (NYSE: TSE) reported Q4 EPS of $0.35, $0.13 worse than the analyst estimate of $0.48. Revenue for the quarter came in at $889 million versus the consensus estimate of $896.51 million.

Fourth Quarter 2019 Summary

• Net income of $6 million, diluted EPS of $0.14 and Adjusted EPS of $0.35
• Adjusted EBITDA of $59 million
• Cash provided by operating activities of $48 million; Free Cash Flow of $9 million

Commenting on the Company’s performance, Frank Bozich, Trinseo’s President and Chief Executive Officer, said, “The fourth quarter was a continuation of the market conditions we’ve seen throughout 2019. Amid these conditions, we took appropriate steps to improve our cost structure and optimize working capital, which resulted in a very cash generative year for Trinseo.”

GUIDANCE:

Trinseo sees FY2020 EPS of $2.40-$2.84, versus the consensus of $3.51.

Full Year 2020 Outlook

• Full-year 2020 net income of $95 million to $112 million and earnings per diluted share of $2.40 to $2.84
• Full-year 2020 Adjusted EBITDA of $325 million to $350 million and Adjusted EPS of $2.40 to $2.84
• Outlook includes an estimated pre-tax impact of $5 to $10 million from lower customer demand in China in the first quarter related to the coronavirus outbreak

Commenting on the outlook for 2020, Mr. Bozich said, “Our full-year outlook assumes market conditions that are similar to those in the second half of 2019. We are confident that our Business Excellence program, our improved cost structure from the recent restructuring, and our focus on the growth areas of our portfolio will largely offset incremental headwinds, including lower year-over-year styrene margins.”

Mr. Bozich continued, “We are closely monitoring the coronavirus as it relates to our business operations and the safety of our employees. While our operations haven’t been affected, we are seeing lower demand from our customers in China due to delayed plant startups following Chinese New Year. We realize this is a fluid situation but we have included an estimate of the first quarter impact in our full-year outlook.”

For earnings history and earnings-related data on Trinseo (TSE) click here.

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