WILMINGTON, DE — Ashland Inc. (NYSE: ASH) reported a 7% increase in fiscal third-quarter sales as higher volumes and pricing lifted revenue across all business units, though adjusted earnings declined under the weight of earlier production disruptions and inflationary costs.
Sales rose to $497 million for the quarter ended June 30 from $463 million a year earlier. Volumes increased 6%, pricing contributed about 1%, and favorable currency movements added $3 million.
Adjusted EBITDA fell 4% to $109 million from $113 million, producing a margin of 21.9%. Ashland attributed the decline to lower production rates earlier in the fiscal year, inflationary pressures and normalized incentive compensation, which more than offset stronger volumes and pricing.
The specialty ingredients company reaffirmed its fiscal 2026 sales forecast of $1.835 billion to $1.87 billion and adjusted EBITDA guidance of $385 million to $400 million.
Ashland lowered its adjusted earnings-per-share outlook to low- to mid-single-digit growth from mid- to high-single-digit growth, citing a higher tax rate tied to unfavorable discrete items.
Net income totaled $16 million, or 35 cents per diluted share, compared with a $742 million loss a year earlier. Income from continuing operations was $41 million, or 89 cents per share, reversing a prior-year loss.
Adjusted income from continuing operations excluding intangible amortization declined to $47 million from $48 million. Adjusted earnings on that basis were $1.02 per diluted share, compared with $1.04 a year earlier.
“Sales increased seven percent year-over-year, with growth achieved across all business units and regions,” Chair and Chief Executive Officer Guillermo Novo stated. He added that pricing actions helped recover higher raw material costs.
Life Sciences sales increased 11% to $180 million, driven by pharmaceutical demand across regions and product categories. Adjusted EBITDA rose 11% to $60 million, resulting in a 33% margin.
Personal Care sales climbed 5% to $155 million, supported by growth in skin care, hair care, biofunctional actives and microbial protection. Adjusted EBITDA increased to $45 million from $41 million, with a 29% margin.
Specialty Additives sales rose 4% to $136 million as pricing, product mix and coatings demand offset weakness in construction and energy markets. Adjusted EBITDA fell to $20 million from $26 million, reflecting the lingering effects of lower production rates and higher operating costs.
Intermediates sales increased 12% to $37 million, including higher merchant sales tied to demand for N-Methyl-2-pyrrolidone from North American electric-vehicle battery and energy-storage customers. Adjusted EBITDA declined to $4 million from $7 million because of lower advanced manufacturing tax-credit benefits.
Operating cash flow increased to $121 million from $114 million, primarily because of working-capital improvements. Ongoing free cash flow declined to $103 million from $108 million but remained above a 90% conversion rate.
Ashland ended the quarter with net leverage of 2.4 times, returning to its long-term target range.
The company continues to expect ongoing free cash flow conversion above 50% of adjusted EBITDA and capital expenditures of about $90 million for the full year.
Novo projected sequential improvement in the fourth quarter as plant reliability and throughput improve, while cautioning that raw material and freight costs are expected to remain elevated.
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