Olin (OLN) Stock Plummets on Disappointing Outlook
NEW YORK (TheStreet) -- Shares of Olin (OLN) - Get Report are plunging 22.01% to $20.34 on heavy trading volume Friday afternoon after the company provided weak guidance for the 2016 second quarter.
After yesterday's market close, the chemical products company said it sees approximately break-even earnings. Analysts are modeling earnings of 31 cents per share.
"This revision to prior expectations was driven primarily by weaker than expected domestic caustic soda demand during May and June, which led to export sales comprising a higher percentage of total caustic soda volumes," the Clayton, MO-based company said in a statement.
As a result, the average caustic soda pricing was lower than expected, Olin said.
The company also forecasts adjusted EBITDA of about $180 million for the period and adjusted EBITDA between $840 million and $900 million for the full year. Analysts estimated $973.3 million for 2016, Bloomberg noted.
Olin believes its performance in the second half of the year will benefit from higher domestic and export caustic soda pricing.
Third quarter pricing expected to surpass first quarter levels, followed by sequential improvement in fourth quarter 2016, the company noted.
About 14.62 million of Olin's shares changed hands so far today vs. its average volume of 2.72 million shares per day.
Separately, TheStreet Ratings Team has a "Hold" rating with a score of C on the stock.
The primary factors that have impacted the rating are mixed. The company's strengths can be seen in multiple areas, such as its increase in stock price during the past year, robust revenue growth and good cash flow from operations.
But the team also finds weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
You can view the full analysis from the report here: OLN