Why Orion Engineered Carbons Stock Tumbled More Than 30% in March
What happened
Shares of Orion Engineered Carbons (NYSE: OEC) plummeted 32.1% in March, according to data provided by S&P Global Market Intelligence. The maker of Carbon Black -- a commercial form of solid carbon used by several industries -- sold off after the company reported its fourth-quarter results.
So what
On the one hand, Orion Engineered Carbons reported solid numbers for the fourth quarter. Revenue came in at $386 million, which was up 13.6% year over year and beat analysts' expectations by more than $12 million. Adjusted earnings, meanwhile, were $0.48 per share, which came in $0.01 per share ahead of the consensus estimate.
However, its underlying results weren't quite as good since volumes declined 6.1% due to a plant closure and reduced exports to China. Furthermore, the company offered a lackluster outlook for 2019, and anticipates that its adjusted EBITDA will be between $280 million to $300 million this year, which at the midpoint is 1.5% below last year's total. It also noted that it needs robust rubber demand and an acceleration in its specialty business in China to fuel a high-end finish.
Now what
Orion Engineered Carbons is under pressure from weak market conditions, especially in China. That's due in part to its current trade dispute with the U.S. While the two countries are reportedly close to solving their differences, talks could fall apart. If that happens, Orion's shares could remain under pressure until the Chinese economy bounces back, which would likely take even more time.
10 stocks we like better than Orion Engineered CarbonsWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has quadrupled the market.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Orion Engineered Carbons wasn't one of them! That's right -- they think these 10 stocks are even better buys.
*Stock Advisor returns as of March 1, 2019
Matthew DiLallo 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.