Ashland Inc.

Third-quarter sales were $497 million, up 7% year over year, driven primarily by 6% volume growth and about 1% pricing; foreign exchange added about $3 million, or 1%, to sales. Adjusted EBITDA was $109 million versus $113 million in the prior-year quarter, with margin at 21.9% versus 24.4%; adjusted EPS was $1.20 versus $1.40. Free cash flow totaled $103 million versus $108 million a year ago, and inventory was down nearly $80 million fiscal year to date. The company ended the quarter with $936 million of available liquidity and net leverage of 2.4x. For fiscal 26, Ashland reaffirmed sales guidance of $1.835 billion to $1.870 billion and adjusted EBITDA guidance of $385 million to $400 million, while revising adjusted EPS outlook to low- to mid-single-digit growth from mid- to high-single-digit growth due to a higher tax rate from unfavorable discrete items. The company continues to expect free cash flow conversion of greater than 50% of adjusted EBITDA for the year.

Guillermo Novo said the quarter showed strong demand, disciplined commercial execution, and healthy free cash flow, and he emphasized that sales growth was broad-based across all businesses. His tone was constructive but still focused on fixing operations: he said profitability is still being affected by earlier production challenges, but that pricing, manufacturing, and cost actions are gaining traction and should support further improvement in Q4. He also highlighted that Globalize and Innovate have already exceeded or met full-year targets through nine months and called the new technology platforms a meaningful future growth opportunity.

William C. Whitaker highlighted the key financial drivers: sales of $497 million, adjusted EBITDA of $109 million, margin of 21.9%, and adjusted EPS of $1.20. He said cash generation remained strong, with $103 million of ongoing free cash flow, conversion above 90%, and nearly $80 million of inventory reduction year to date. He also noted $936 million of available liquidity, net leverage of 2.4x, and the refinancing of the credit agreement on attractive terms to extend maturities and strengthen flexibility. On guidance, he said the company expects a further step up in profitability in Q4 and kept the full-year sales and EBITDA ranges unchanged, while lowering EPS growth expectations because of a higher tax rate tied to unfavorable discrete items.

Analysts focused on pricing, manufacturing recovery, and the outlook for 2027. Management said pricing actions are covering inflation, with Q4 expected to show a fuller benefit as pricing realization flows through; William said Q3 pricing moved from down 2% in Q2 to up 1% in Q3, with Q4 expected to be roughly a similar sequential step. On manufacturing, Guillermo said Hopewell and other optimization actions should start flowing through more clearly after the next couple of quarters, while inventory-driven absorption hurt EBITDA by roughly $30 million to $35 million year to date. Questions also centered on the Ancora agreement and possible sale process; Guillermo said the board will let the new committee do its work and would not speculate on outcomes, but stressed that execution and value creation remain the priority.