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Huntsman Corp(HUN-N)

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Why Huntsman Stock Rallied as Much as 10% Today

Motley Fool - Tue Feb 15, 2022

What happened

Shares of Huntsman Corporation(NYSE: HUN), a specialty chemicals maker, rose as much as 10% on Feb. 15. The driver of that advance was most likely the company's fourth-quarter 2021 earnings release, which hit the market prior to the start of trading. Investors liked what they read.

So what

In the fourth quarter of 2021, Huntsman posted revenues of $2.3 billion, up 38% from the $1.67 billion it brought in during the same quarter of 2020. The company benefited from higher selling prices across its four divisions, with polyurethanes, performance products, and advanced materials also seeing volume gains. Textile effects was the lone group to see volume declines. Advanced materials volumes were aided to some degree by an acquisition. Overall, the company's top line came in slightly higher than analysts had been predicting.

A person in a white lab coat is pouring a chemical solution from a beaker into a flask.

Image source: Getty Images.

On the bottom line, Huntsman reported adjusted earnings per share of $0.95 in the fourth quarter of 2021 compared to $0.51 per share in the same quarter of the prior year. Higher volumes helped the company overcome inflationary headwinds that were felt across its portfolio. Notably, Wall Street consensus was for earnings of $0.88 per share, so Huntsman managed to beat on both the top and the bottom lines. Investors tend to like that, particularly when the bottom line beat is material. So it's no wonder that investors were pleased with the update.

Now what

The good news didn't stop there, however, as management reiterated its upbeat outlook for 2022, which implies higher earnings, improved margins, and increased cash flow. It also reminded investors that it increased the dividend by 13% on Feb. 14 just a day before it released earnings. So not only did the specialty chemical maker end 2021 on a solid note, but it looks like 2022 could get off to a good start as well.

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Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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