Earnings Preview: Omnova Solutions

| About: OMNOVA Solutions (OMN)

OMNOVA Solutions Inc. (NYSE:OMN) provides emulsion polymers, specialty chemicals, and decorative and functional surfaces for commercial, industrial, and residential end uses primarily in North America, Europe, and Asia. The company operates in two segments, Performance Chemicals and Decorative Products.

It is scheduled to report its Q2 2012 results on June 28, 2012, before the market opens.

Technical Overview

Key Metrics

  • Market Cap: 322.87M

  • 52-week trading range: 3.07 - 8.22

  • Trailing P/E: 33.77

  • Forward P/E: 8.13

  • Price/Sales: 0.27

  • Price/Book: 2.32

  • PEG Ratio: 0.58

  • Total Debt: 455.40M

  • Annual dividend yield: N/A

  • Return on Equity: 19.33%

  • Return on Assets: 5.83%

Recent EPS Actuals vs. Estimates

The company has met or beaten analysts' estimates in the last three quarters. In the last quarter it reported $0.22 EPS, beating analyst estimates of $0.10.

The consensus EPS is $0.15 based on four analysts' estimates, down from $0.16 a year ago. Revenue estimates are $317.00M, down from $329.90M a year ago. The median target price by analysts for the stock is $8.50.

Average recommendation: Overweight

Source: Marketwatch

Latest Developments

  • On May 2, 2012, OMNOVA Solutions' Fitchburg, Massachusetts specialty chemicals facility recently received an Environmental Merit Award from the New England Region One Office of the U.S. Environmental Protection Agency (EPA).

  • On March 7, 2012, OMNOVA Solutions announced that it has sold its U.K.-based Muraspec commercial wallcovering business to affiliates of a2e Venture Catalysts Limited, and its principal Amin Amiri based in Manchester, United Kingdom.


OMNOVA Solutions Inc. operates in Specialty Chemicals industry. The company could be compared to The Dow Chemical Company (NYSE:DOW), FutureFuel Corp. (NYSE:FF), Ferro Corp. (NYSE:FOE), and Rentech, Inc. (NYSEMKT:RTK). Below is the table comparison of the most important ratios between these companies and the industry.

Below is the chart comparison with the stock price changes as a percentage for the selected companies and S&P 500 index for the last one year period.

OMN Chart

OMN data by YCharts

Competitors' Latest Development

  • On May 24, 2012, Reuters reported that an arbitrator ruled Kuwait's state-run chemical company must pay Dow Chemical Co $2.16 billion for wrongly canceling a planned plastics joint venture in 2008, Dow said on Thursday.

  • On April 26, 2012, The Dow Chemical Company announced that it is confident in its ability to deliver higher and sustainable earnings growth over the long-term.

  • On April 25, 2012, Ferro Corporation announced that for fiscal 2012, it expects net sales, excluding precious metal pass-throughs, to be approximately the same as in fiscal 2011, after including the negative impact of lower forecast foreign exchange rates.

  • On April 19, 2012, The Dow Chemical Company announced that the company will construct a new world-scale ethylene production plant at Dow Texas Operations in Freeport, TX, as part of Dow's previously announced comprehensive plan to further connect its U.S. plants.

  • On April 12, 2012, The Dow Chemical Company announced that its Board of Directors has declared a 28% increase in the second quarter dividend, from $0.25 per share to $0.32 per share.

  • On April 2, 2012, The Dow Chemical Company announced it is implementing cost reductions in line with its commitment to actively manage its portfolio and in response to continued weakness in the European economy.

  • On March 28, 2012, Ferro Corporation announced the appointment of Jeffrey L. Rutherford as Vice President and Chief Financial Officer. He will begin his new role at Ferro on April 2, 2012.

  • On March 27, 2012, BM&FBovespa (Bovespa) announced that, on April 4, 2012, the Brazilian Depositary Receipts (BDRs) Level I of The Dow Chemical Company will start being traded on Bovespa's over-the-counter (OTC) market, quoted in BRL per unit and with standard trading lot of 100 BDRs, under the ticker DOWB11B.

  • On March 21, 2012, The Dow Chemical Company's Dow AgroSciences LLC and Dualsystems Biotech announced a drug profiling agreement. Under the agreement, Dualsystems Biotech will use its drug profiling platform to identify molecular targets for an undisclosed small molecule lead candidate in Dow AgroSciences' agrochemical discovery program.

  • On March 5, 2012, Dow AgroSciences LLC, a wholly owned subsidiary of The Dow Chemical Company, announced that it has divested of its European Dithane fungicide business to Indofil Industries Ltd.

  • On February 29, 2012, Ferro Corporation announced that for fiscal 2012, it expects sales, excluding precious metal pass-throughs, to be approximately the same as in 2011, after adjusting for the negative impact of lower forecasted foreign exchange rates.

  • On February 27, 2012, Rentech Inc. announced that the Board of Directors has authorized the repurchase of up to $25 million of its outstanding common shares. The share repurchase program will be funded by the company's available cash.

  • On February 9, 2012, The Dow Chemical Company announced that it has declared a dividend of $0.25 per share, payable April 30, 2012, to shareholders of record on March 30, 2012.

  • On February 3, 2012, Rentech Inc. announced that the Board of Directors of the company have approved a change of Rentech's fiscal year end, to December 31, from September 30.

Sources: Yahoo Finance, Google Finance, Marketwatch, Finviz, Reuters.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.