An unimpressive third-quarter performance by Trinseo (TSE, $62.29), a global materials solutions provider of plastics, latex binders, and synthetic rubber, saw the company’s share price plunge by nearly 18% last week.
In the last five days leading into October 10, Trinseo fell by nearly 24% from $81.43 on October 4 to $62.26 on October 10. Will the bleeding stop?
The stagnating North American automotive market, coupled with a struggling tire market and global trade uncertainties, are believed to have played a major role in Trinseo's dismal performance.
After the release of preliminary third-quarter results, management emphasized taking corrective measures to mitigate the challenges faced and post numbers more in-line with expectations. Despite the positive words, many analysts expect net income to hover around $74 - $80 million, thus missing prior guidance by nearly $15 million. While the adjusted EBITDA is expected to be in-between $140 million and $146 million, it is estimated to miss prior guidance by roughly around $12 million.