Axalta has reported a fourth-quarter net loss of $36.5 million, compared with net income of $38.6 million in the year-ago quarter. Sales were up 2.6% year-on-year (YOY), to $1.03 billion. Adjusted earnings totaled $68.6 million, or 28 cts/share, up 18.3% YOY but slightly behind analysts' consensus estimate of of 29 cts/share, as reported by Thomson Reuters (New York). Sales increased due to 2.2% higher selling prices and 3.4% growth in volumes, offset partly by negative currency impacts. Severance charges, a write-down in Venezuela, and charges related to a term loan refinancing were the reasons for the quarterly net loss.
Fourth-quarter sales and operating performance “slightly exceeded the expectations set in October, driven by volume and favorable product mix,” says Axalta chairman and CEO Charles Shaver. Sales growth was led by Asia Pacific and North America, with the company posting volume gains in all regions except Latin America.
Performance coatings segment sales grew 3.4% YOY, to $608.8 million, and segment adjusted EBITDA was up 5.8%, to $138.5 million. Volumes were up 2.5% during the fourth-quarter, while selling prices rose 5.2%, driving the increases in sales and profits.
Transportation coatings segment sales were up 1.3% YOY, to $420.6 million, while segment adjusted EBITDA increased 7.4%, to $88.0 million. Volumes grew by 4.7%, but this was offset by prices falling by 2.0%, and negative currency impacts.
Axalta expects full-year 2017 sales grow by 1-3% from 2016 sales of $4.07 billion, with full-year adjusted EBITDA totaling $930-$980 million, compared with 2016 adjusted EBITDA OF $907.1 million.