A month has gone by since the last earnings report for Orion (OEC). Shares have added about 0.3% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Orion due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Orion’s Q1 Earnings Miss on Lower Pricing, Sales Down Y/Y
Orion posted an adjusted loss of 11 cents per share in the first quarter of 2026 compared with adjusted earnings of 22 cents a year ago. The result missed the Zacks Consensus Estimate of 19 cents by 157.9%.
Net sales were $459.5 million, down 3.8% year over year, and came in 0.5% below the consensus estimate of $461.9 million. Total volumes rose 1.9% to 256.5 thousand metric tons as demand strengthened late in the quarter.
Management pointed to lower pricing tied to oil pass-through and an unfavorable mix as the primary headwinds, even as shipments improved late in the period.
That pricing backdrop also weighed on profitability, particularly in Rubber Carbon Black, where the company cited calendar 2026 agreements and regional mix as major drags. Specialty Carbon Black was steadier, supported by the mix and favorable foreign exchange.
Segmental Review
Specialty Carbon Black delivered improved results, helped by stronger volumes and a favorable mix. Segment net sales increased 5.6% year over year to $169.7 million, while volumes rose 3.4% to 64 kmt. Adjusted EBITDA grew 6.7% to $27.1 million, supported by mix and positive foreign exchange, partially offset by absorption headwinds tied to inventory draw.
Rubber Carbon Black remained the key pressure point. Segment net sales fell 8.6% to $289.8 million despite a 1.4% volume increase to 192.5 kmt. Adjusted EBITDA dropped 53.4% to $19 million as lower 2026 contractual prices, adverse regional mix and the pass-through effect of lower year-over-year oil costs more than offset the volume benefit.
Balance Sheet and Cash Flow
Orion recorded free cash outflow of $48.5 million in the quarter, reflecting typical seasonality and working-capital use. Net cash used in operating activities was $12.4 million, consistent with the company’s quarterly capital spending of $36 million. Net debt ended the quarter at $965.3 million, and the net debt-to-adjusted EBITDA ratio was 4.2x.
Outlook
For 2026, Orion now expects adjusted EBITDA of $170-$210 million, up from the prior view of $160-$200 million. The company reiterated capital expenditures of about $90 million. Orion also updated its free cash flow framework, now calling for free cash outflow of $25-$50 million versus its prior expectation of free cash flow of $25-$50 million.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
The consensus estimate has shifted -21.43% due to these changes.
VGM Scores
Currently, Orion has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for value investors.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Interestingly, Orion has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Orion belongs to the Zacks Chemical - Specialty industry. Another stock from the same industry, PPG Industries (PPG), has gained 2.8% over the past month. More than a month has passed since the company reported results for the quarter ended March 2026.
PPG Industries reported revenues of $3.93 billion in the last reported quarter, representing a year-over-year change of +6.7%. EPS of $1.83 for the same period compares with $1.72 a year ago.
For the current quarter, PPG Industries is expected to post earnings of $2.25 per share, indicating a change of +1.4% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.1% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for PPG Industries. Also, the stock has a VGM Score of C.
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Orion S.A. (OEC): Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).