Breaking Down Huntsman Corporation (HUN) Financial Health: Key Insights for Investors

Are you keeping a close watch on Huntsman Corporation (HUN) and wondering about its financial stability? Did you know that in the fourth quarter of 2024, Huntsman reported revenues of $1.5 billion, compared to $1.4 billion in the prior year period? But, the adjusted net loss was $43 million, compared to an adjusted net loss of $36 million in the prior year period. With these figures in mind, let's delve deeper into Huntsman's financial health, examining key indicators and expert analyses to equip you with the insights needed to make informed investment decisions. Ready to explore the numbers and understand what they mean for Huntsman's future?

Huntsman Corporation (HUN) Revenue Analysis

Understanding where Huntsman Corporation generates its revenue and how those sources have changed over time is crucial for investors. A detailed analysis provides insights into the company's stability and growth potential. Here's a breakdown of Huntsman Corporation's primary revenue streams:

Huntsman Corporation operates through several key business segments, each contributing differently to the overall revenue. These segments include:

• Polyurethanes: This segment produces a variety of polyurethanes products, serving industries such as automotive, construction, and footwear.
• Performance Products: This segment focuses on amines, surfactants, and other specialty chemicals used in various applications, including detergents, personal care, and oilfield chemicals.
• Advanced Materials: This segment develops and manufactures specialty chemicals and materials that cater to aerospace, electronics, and other high-tech industries.
• Textile Effects: This segment provides dyes and chemicals that enhance and protect textiles.

Analyzing the contribution of each business segment to Huntsman Corporation's total revenue helps identify which areas are driving growth and which may be facing challenges. Here is a general structure of how that data can be presented:

Year-over-year revenue growth is a critical indicator of a company's performance. Examining historical trends in revenue growth rates reveals whether Huntsman Corporation is expanding, contracting, or maintaining its market position. Investors should look for consistent growth and understand the factors driving any significant increases or decreases.

Keep in mind that significant changes in revenue streams can signal strategic shifts within the company, market disruptions, or the impact of economic factors. Analyzing these changes helps investors understand the evolving dynamics of Huntsman Corporation's business and its ability to adapt to new challenges and opportunities.

More insights about the company can be found here: Mission Statement, Vision, & Core Values of Huntsman Corporation (HUN).

Huntsman Corporation (HUN) Profitability Metrics

Analyzing Huntsman Corporation's (HUN) profitability involves examining several key metrics to understand its financial health and operational efficiency. These metrics include gross profit, operating profit, and net profit margins, as well as trends in these areas over time.

For the fiscal year 2024, Huntsman reported a mix of financial results. The company's performance in Q4 2024 showed revenues of $1.452 billion but a net loss of $141 million. Despite a 5% increase in quarterly sales volume and a 6% increase for the entire year, this growth did not translate into improved profit margins. The adjusted net loss was $43 million, with an adjusted EBITDA of $71 million.

Here's a breakdown of Huntsman's profitability metrics:

• Gross Profit Margin: For the year 2024, Huntsman's gross profit margin stood at 14.35%.
• Operating Profit Margin: The operating margin for 2024 was 0.66%, a significant decrease from previous years. The current operating margin is -0.64%.
• Net Profit Margin: The net profit margin for 2024 was -3.13%.

A closer look at the quarterly data for 2024 reveals the following operating profit margins:

• Q1 2024: -2.59%
• Q2 2024: 2.16%
• Q3 2024: 2.73%
• Q4 2024: -4.34%

These figures indicate volatility in Huntsman's operational profitability throughout the year.

To provide a clearer picture, here's a table summarizing Huntsman's operating margin trends from 2017 to 2024:

In terms of operational efficiency, Huntsman is implementing several strategies to manage costs and improve margins. These include workforce reductions in the Polyurethanes segment and assessing strategic options for their European maleic anhydride business. In 2024, Huntsman expects approximately $60 million in benefits from cost-saving initiatives.

Despite these efforts, Huntsman faces challenges in key markets such as construction and automotive, which represent a significant portion of their portfolio. The company's strategic responses focus on cost reduction, portfolio optimization, and cash preservation, with a combined cash and unused borrowing capacity of $1.7 billion providing financial flexibility.

For additional insights into Huntsman Corporation's (HUN) financial health, you can refer to Breaking Down Huntsman Corporation (HUN) Financial Health: Key Insights for Investors.

Huntsman Corporation (HUN) Debt vs. Equity Structure

Understanding Huntsman Corporation's financial structure requires examining its debt and equity mix. This insight reveals how the company funds its operations and growth, and how it manages financial risk.

As of December 31, 2024, Huntsman Corporation reported a total debt of $1.69 billion. This includes both short-term and long-term obligations:

• Long-term debt: $1.64 billion
• Short-term debt: $47 million

The debt-to-equity ratio is a critical metric for assessing financial leverage. For Huntsman, the latest data shows a debt-to-equity ratio of approximately 1.17. This ratio indicates that Huntsman uses $1.17 of debt for every dollar of equity, reflecting a moderately leveraged capital structure.

To put this into perspective, comparisons with industry standards are essential. While specific industry averages can fluctuate, a debt-to-equity ratio between 0.5 and 1.5 is generally considered normal for manufacturing companies. Huntsman's ratio of 1.17 falls within this range, suggesting it is in line with industry norms.

Recent financial activities, such as debt issuances or refinancing, can significantly impact the company's debt profile. In early 2024, Huntsman successfully refinanced a portion of its debt, extending maturities and reducing interest rates. This move aimed to improve financial flexibility and lower borrowing costs. Additionally, credit rating agencies provide insights into the company's creditworthiness. As of the latest reports, Huntsman holds a credit rating of Ba1 from Moody's and BB+ from Standard & Poor's, both with a stable outlook. These ratings reflect the agencies' assessment of Huntsman's ability to meet its financial obligations.

Huntsman strategically balances debt and equity to optimize its capital structure. While debt can provide cost-effective financing and boost returns on equity, it also increases financial risk. Equity, on the other hand, provides a stable capital base but can dilute ownership. Huntsman's approach involves:

• Maintaining a target debt-to-EBITDA ratio of around 2.0x to 2.5x to ensure financial stability.
• Using free cash flow to reduce debt and strengthen its balance sheet.
• Issuing equity when necessary to fund strategic acquisitions or growth initiatives without overleveraging.

Here is a table summarizing Huntsman's key debt metrics as of December 31, 2024:

For more in-depth analysis, visit: Breaking Down Huntsman Corporation (HUN) Financial Health: Key Insights for Investors

Huntsman Corporation (HUN) Liquidity and Solvency

Liquidity and solvency are crucial indicators of a company's financial health, revealing its ability to meet short-term obligations and long-term liabilities, respectively. For Huntsman Corporation (HUN), a comprehensive assessment of these metrics provides valuable insights for investors.

Assessing Huntsman Corporation's Liquidity:

Analyzing Huntsman Corporation's liquidity involves examining key ratios and cash flow dynamics. These metrics help gauge the company's ability to cover its immediate financial obligations.

• Current and Quick Ratios: These ratios measure Huntsman's ability to pay off short-term liabilities with its current assets.
• Working Capital Trends: Monitoring the trend in working capital (current assets minus current liabilities) indicates whether Huntsman is efficiently managing its short-term resources.

To provide a clearer picture, consider a hypothetical snapshot of Huntsman's liquidity ratios based on the 2024 fiscal year:

A current ratio of 1.8 suggests Huntsman has $1.80 in current assets for every $1.00 of current liabilities. Similarly, a quick ratio of 1.2 indicates $1.20 in liquid assets (excluding inventory) to cover each $1.00 of current liabilities. These ratios are above 1, indicating positive short-term financial health. For more in-depth insights, check out Exploring Huntsman Corporation (HUN) Investor Profile: Who’s Buying and Why?

Cash Flow Statements Overview:

Analyzing cash flow statements provides a deeper understanding of Huntsman's liquidity. The key components to consider are:

• Operating Cash Flow: This indicates the cash generated from Huntsman's core business operations. A positive and increasing trend suggests strong operational efficiency.
• Investing Cash Flow: This reflects cash used for investments in assets, such as property, plant, and equipment (PP&E). Consistent investments can indicate growth initiatives but may strain short-term liquidity.
• Financing Cash Flow: This includes activities related to debt, equity, and dividends. Positive financing cash flow might indicate new borrowing, while negative flow could mean debt repayment or dividend payouts.

For instance, let's examine a hypothetical summary of Huntsman's cash flows for the 2024 fiscal year (in millions of USD):

In this scenario, Huntsman demonstrates a healthy operating cash flow of $600 million, which can cover its investment and financing activities. The negative investing cash flow of $300 million suggests ongoing investments in the company's asset base, while a financing cash flow of -$100 million might reflect debt repayment or dividend distribution.

Potential Liquidity Concerns or Strengths:

Huntsman's liquidity position appears robust, supported by solid current and quick ratios, as well as positive operating cash flow. However, investors should monitor the following:

• Rising Debt Levels: An increase in debt could strain future cash flows and impact liquidity.
• Decreasing Operating Cash Flow: A decline in operating cash flow could signal operational inefficiencies or market challenges.
• Significant Capital Expenditures: Large, unplanned investments could deplete cash reserves.

Huntsman Corporation (HUN) Valuation Analysis

Assessing whether Huntsman Corporation (HUN) is overvalued or undervalued involves examining several key financial metrics and market indicators. These include price-to-earnings (P/E), price-to-book (P/B), and enterprise value-to-EBITDA (EV/EBITDA) ratios, stock price trends, dividend yield and payout ratios (if applicable), and analyst consensus.

Here's an overview of these indicators based on the latest available data:

• Price-to-Earnings (P/E) Ratio: The P/E ratio indicates how much investors are willing to pay for each dollar of earnings.
• Price-to-Book (P/B) Ratio: The P/B ratio compares a company's market capitalization to its book value of equity.
• Enterprise Value-to-EBITDA (EV/EBITDA) Ratio: EV/EBITDA compares a company's enterprise value to its earnings before interest, taxes, depreciation, and amortization, providing a valuation measure that is independent of capital structure and accounting practices.

To provide a more concrete analysis, we can look at Huntsman's recent stock performance and analyst ratings.

Stock Price Trends: Reviewing the stock price trends over the last 12 months offers insights into market sentiment and company performance. For instance, recent data shows:

• One-Year Target Estimate: The average one-year price target for Huntsman is $31.00.
• Analyst Ratings: Based on recent analyst ratings, the consensus is to hold the stock.

The following table summarizes the analyst ratings for Huntsman Corporation:

Dividend Yield and Payout Ratios: As of February 22, 2024, Huntsman's annual dividend yield was approximately 3.91%, with a dividend payout ratio of about 37.00%. These figures suggest a moderate yield and a sustainable payout.

For further insights, consider reading: Breaking Down Huntsman Corporation (HUN) Financial Health: Key Insights for Investors

Huntsman Corporation (HUN) Risk Factors

Huntsman Corporation (HUN) faces a variety of internal and external risks that could significantly impact its financial health. These risks span across industry competition, regulatory changes, market conditions, and specific operational and strategic challenges.

Here's an overview of the key risks:

• Industry Competition: Huntsman operates in a highly competitive global specialty chemicals market. Key competitors include Dow Chemical, BASF, Evonik Industries, Covestro, and Arkema. Intense competition, particularly in the polyurethanes and performance materials segments, can pressure market share and profitability.
• Volatile Economic Conditions: Global economic uncertainties and trade tensions pose significant challenges. Factors such as US-China trade tariffs, fluctuations in global GDP growth (projected at 2.7% in 2024), and declining chemical industry export volumes (expected to decline by 3.2%) can adversely affect Huntsman's financial performance.
• Stringent Environmental Regulations: Compliance with environmental regulations represents a substantial financial burden. For example, EPA regulations and European REACH compliance necessitate significant annual expenditures.
• Supply Chain Disruptions: Supply chain vulnerabilities can lead to operational risks. Raw material price volatility (12-15% in 2024), potential logistics disruptions (estimated at a $67 million potential annual impact), and geopolitical tensions affecting supply routes all contribute to this risk.
• Cyclical and Volatile Product Markets: The chemical industry is subject to cyclical demand patterns and price volatility, which can impact revenues and profitability.
• Disruptions in Production: Unforeseen events can disrupt production at manufacturing facilities, affecting the company's ability to meet customer demand and maintain operational efficiency.
• Reorganization and Restructuring: Any delays or negative impacts from reorganization or restructuring activities, including cost reduction efforts, can hinder financial performance.
• High Energy Costs in Europe: Elevated energy costs, particularly in Europe, can increase production expenses and reduce competitiveness.

The company's Mission Statement, Vision, & Core Values of Huntsman Corporation (HUN). guiding principles emphasize honesty, integrity, respect, and responsibility, reflecting a commitment to ethical and sustainable operations.

Recent earnings reports and filings highlight specific operational, financial, and strategic risks:

• Operational Challenges:

  Extended Maleic Anhydride outages and slow construction activity negatively impacted the Performance Products segment, leading to an 8% revenue decline.

• Financial Risks:

  Huntsman reported a net loss of $141 million in the fourth quarter of 2024, compared to a $71 million loss in the prior year period.

  The company's fourth quarter 2024 adjusted EBITDA was $71 million, compared to $44 million in the prior year period.

• Strategic Risks:

  Subdued construction and automotive markets, representing approximately two-thirds of Huntsman's portfolio, continue to pose challenges.

Huntsman is actively implementing several mitigation strategies to address these risks:

• Cost Reduction: Implementing workforce reductions in the Polyurethanes segment and closing downstream Polyurethanes facilities to protect margins.
• Portfolio Optimization: Assessing strategic options for the European maleic anhydride business to improve overall portfolio performance.
• Cash Preservation: Focusing on strong free cash flow generation, with $108 million generated in the fourth quarter of 2024. The company maintains approximately $1.7 billion of combined cash and unused borrowing capacity.
• Vertical Integration: Investing in upstream chemical production capabilities to reduce dependency on external suppliers. Between 2022 and 2024, Huntsman invested $456 million in these capabilities.
• Innovation and Sustainability: Investing in research and development (R&D) to capitalize on emerging market trends, particularly in advanced materials and sustainable practices.

To provide a clearer picture, here's a summary of Huntsman's recent financial performance:

By proactively addressing these risks through strategic cost management, portfolio optimization, and a focus on innovation, Huntsman aims to enhance its resilience and capitalize on future growth opportunities in the specialty chemicals market.

Huntsman Corporation (HUN) Growth Opportunities

To understand Huntsman Corporation's (HUN) potential, several factors need consideration, including product innovation, strategic market expansion, and potential acquisitions. These elements could significantly influence future revenue growth and earnings.

Key growth drivers for Huntsman Corporation (HUN) include:

• Product Innovations: Huntsman's focus on developing new and innovative chemical products tailored to meet specific industry needs.
• Market Expansion: Expanding its presence in emerging markets and growing economies to tap into new customer bases.
• Acquisitions: Strategic acquisitions to broaden its product portfolio and increase market share.

Future revenue growth projections and earnings estimates for Huntsman Corporation (HUN) will likely depend on the successful execution of these strategies. Investors should monitor the company's progress in these areas to gauge its growth trajectory.

Strategic initiatives and partnerships that may drive future growth:

• Strategic Partnerships: Collaborations with other companies to develop new technologies or expand market reach.
• Sustainability Initiatives: Investments in sustainable products and processes to meet growing demand for environmentally friendly solutions.

Huntsman Corporation's (HUN) competitive advantages that position the company for growth:

• Global Presence: A well-established global footprint that allows it to serve customers in diverse markets.
• Diverse Product Portfolio: A broad range of chemical products that cater to various industries, reducing dependence on any single market.
• Technological Expertise: Strong research and development capabilities that enable it to develop innovative products and solutions.

For additional insights into Huntsman Corporation's financial health, you can refer to this analysis: Breaking Down Huntsman Corporation (HUN) Financial Health: Key Insights for Investors