Trinseo Stock Swings As Retail Chatter Spikes On Q4 Results, Restructuring Efforts

Trinseo PLC (TSE) stock dropped as much as 4% at market open on Thursday before recovering to 1% in the green after the materials company posted a wider-than-expected loss for the fourth quarter. Revenue, however, came in slightly above Wall Street estimates.

Retail discussion on Stocktwits surged by 1,300% in the last 24 hours, the biggest jump within materials stocks on Wednesday, as users debated the company’s mixed results and ongoing restructuring efforts.

The stock was up as much as 3% in pre-market trade after Trinseo reported a fourth-quarter loss of $2.70 per share, missing analysts expectations of a $2.03 loss. 

Revenue totaled $821 million, slightly above the projected $818 million but down 2% from the prior year.

For the full year, the maker of plastics and latex binders reported revenue of $3.5 billion, marking a 4% drop from $3.7 billion in 2023.

Management attributed the revenue decline to weaker demand across all business segments and a strategic reduction of low-margin sales, which resulted in a 6% drop in net sales. 

However, price increases — primarily driven by higher raw material costs and an improved product mix — offset part of the loss, contributing a 4% gain.

For the full year, Trinseo’s revenue fell 4% to $3.5 billion from $3.7 billion in 2023. However, net loss narrowed significantly to $349 million from $701 million in the previous year.

Looking ahead, the micro-cap company expects a first-quarter net loss between $40 million and $60 million and projects adjusted EBITDA of $60 million to $80 million. This includes approximately $26 million from a polycarbonate technology license agreement.

As part of its restructuring strategy, the company has agreed to sell its polycarbonate manufacturing assets in Stade, Germany, and license the technology to Deepak Chem Limited for $52 million.

“We are seeing seasonally higher volumes to start the first quarter but expect year-over-year declines due to ongoing weakness in automotive, construction, and paper applications in Asia,” CEO Frank Bozich said.

Bozich emphasized that despite macroeconomic challenges, the company’s restructuring efforts, combined with a recent refinancing deal, have positioned it for an eventual market recovery.

Some users expressed disappointment over the company’s outlook, citing management’s comment that no significant demand improvement is expected in 2025.

Others remained optimistic, viewing the reduction in losses and relatively stable revenue as early signs that Trinseo’s restructuring efforts — announced last quarter — are working.

Trinseo said it is merging its Engineered Materials, Plastics Solutions, and Polystyrene divisions and reducing its workforce by streamlining management support roles, as a part of its restructuring strategy.

The company is also discontinuing virgin polycarbonate production at its Stade facility as part of these efforts.

It expects the restructuring to be largely completed by the end of 2025, resulting in annual cost savings of $30 million and profitability improvements of between $15 million and $20 million. 

Trinseo’s stock is down 7% year-to-date, with losses mounting to 17% over the past year. 

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