Element Solutions Inc (ESI, Financial) announced its Q3 2023 financial results on October 25, 2023. The company reported a decrease in net sales and a net loss, impacted by a goodwill impairment from Graphics Solutions. Despite these challenges, ESI reported an increase in adjusted EBITDA on a constant currency basis.
Financial Performance Overview
ESI's net sales for Q3 2023 were $599 million, a decrease of 3% from Q3 2022. The company reported a GAAP diluted loss per share of $0.13, inclusive of a $0.33 negative impact from Graphics Solutions' goodwill impairment. The reported net loss was $32 million, as compared to a net income of $53 million in the same period last year. Despite these challenges, ESI reported an adjusted EBITDA of $134 million, an increase of 2% from Q3 2022 on a constant currency basis.
Executive Commentary
President and Chief Executive Officer Benjamin Gliklich commented on the company's performance, stating:
“Element Solutions reported strong sequential adjusted EBITDA growth this quarter driven by a recovery in electronics and increasing margins, in line with our expectation for meaningful improvement against the first half of 2023. With our ongoing focus on operational excellence and accelerated customer activity for next-generation handset production, we experienced a stronger than expected third quarter."
Financial Tables Summary
ESI's financial tables reveal a decrease in net sales for both the Electronics and Industrial & Specialty sectors. The Electronics sector reported net sales of $367 million, a decrease of 6% from Q3 2022. The Industrial & Specialty sector reported net sales of $232 million, an increase of 1% from Q3 2022. The company's adjusted EBITDA for Q3 2023 was $134 million, relatively flat when compared to Q3 2022. On a constant currency basis, adjusted EBITDA increased 2%.
Outlook and Guidance
Looking ahead, ESI expects full year 2023 adjusted EBITDA of approximately $485 million, adjusted EPS of approximately $1.30 and free cash flow of approximately $265 million. The company remains optimistic about its trajectory despite the uncertain macro environment and industrial weakness in Europe and China.
Explore the complete 8-K earnings release (here) from Element Solutions Inc for further details.
