Axalta Coating Systems (AXTA) Misses Q3 EPS by 33c, Revenues Beat

Axalta Coating Systems (NYSE: AXTA) reported Q3 EPS of $0.00, $0.33 worse than the analyst estimate of $0.33. Revenue for the quarter came in at $1.03 billion versus the consensus estimate of $954.27 million.

Robert W. Bryant, Axalta's President and CEO, commented, "Although economic impacts from the coronavirus pandemic persisted across our business in the period, we were very pleased to see rapidly improving demand, and the effectiveness of our cost management programs has continued to help offset volume impacts. We are proud to report stronger, and actually record-setting, operating earnings metrics thanks to the success we have had as a coordinated global team in responding to these considerable end-market demand challenges."

Mr. Bryant continued, "Axalta saw ongoing demand recovery across all business lines and regions during third quarter, and our team executed well on cost actions to deliver a result that surpassed expectations set in July. The global team produced year-over-year temporary operating cost savings of approximately $50 million in the quarter. Our operating results showcase the resilience of Axalta's coatings businesses, which have provided superior service for customers throughout 2020. We also made good progress with structural cost savings, including ongoing Axalta Way incremental savings on track to meet our goal for the year, and early contributions from our recently announced incremental COVID-driven restructuring actions."

Mr. Bryant concluded, "In addition to meeting delivery requirements throughout the pandemic, we have also enjoyed new business gains during the period from existing and new customers as we continue to commercialize new products from our innovation pipeline and drive overall execution of our organic growth plan. I remain thankful to work with a team of such dedicated professionals who continue to demonstrate the Axalta Way and prove that devotion to customer satisfaction produces results."

FY GUIDANCE:

• Net sales: Expected to be down ~18% compared to 2019 including -2% FX and M&A impact
• Q4 net sales: Expected to be down ~6-8% compared to Q4 2019
• Adjusted EBIT: $495-515 million
• Adjusted diluted EPS: $1.15-1.20
• Interest expense: ~$155 million
• Diluted shares outstanding: ~236 million
• Free cash flow: $280-310 million; including $90 million capex
• Tax rate: ~20-21%

For earnings history and earnings-related data on Axalta Coating Systems (AXTA) click here.

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