Shares of chemicals-and-ammunition-maker Olin Corp (OLN -18.09%), soon to merge with Huntsman (HUN -19.26%), tumbled 17.8% through 11:35 a.m. ET Friday after missing earnings last night.
Heading into the report, analysts forecast Olin would earn $0.12 per share on sales of $1.8 billion. Sales came up short at $1.7 billion, though, and instead of reporting a 12-cent profit, Olin reported a loss of $0.12 per share.
Oops.
Image source: Getty Images.
Olin Q2 earnings
Olin operates three main businesses: Chlor Alkali Products and Vinyls, where sales declined 14% year over year; Epoxy, where sales grew 27%; and Winchester -- the ammunition company -- which posted 12% sales growth.
The two gainers balanced out the single declining business, and when all was said and done, Olin ended up with sales shrinking only 1% year over year.
(That's the good news. The bad news is that the tiny sales decline didn't prevent Olin's losses from soaring 12x in size, from $0.01 per share a year ago, to $0.12 this time around.)
NYSE: OLN
Key Data Points
What's next for Olin stock
But here's what investors need to consider: Olin is in the process of conducting a merger of equals with chemicals company Huntsman. It probably had an incentive, therefore, to take a "big bath" approach to its bad news this past quarter, cramming as many losses as possible into the quarter so that future quarters, post-merger, will look better by comparison -- and so management will look smarter for undertaking the merger.
Saying that "second quarter 2026 results included acquisition-related costs of $10.6 million related to this pending merger" further suggests that this is what was going on.
Will it work out for Olin? That remains to be seen -- as does whether the merger even happens. Closing is only scheduled to happen sometime in early 2027, so... stay tuned.
