Ashland Reverses Adjusted EBITDA Decline as Pharma Streak Extends

The Tip Desk · November 4, 2026 · 5 min read

Fourth-quarter sales were $498 million, up 4% from a year earlier, and Adjusted EBITDA was $121 million, up 2% after a 4% year-over-year drop in the third quarter.

Ashland Inc. (ASH) reported fourth-quarter sales of $498 million, up four percent from $478 million a year earlier, after a seven percent year-over-year increase in the third quarter. Adjusted EBITDA was $121 million, up two percent from $119 million, reversing a four percent year-over-year decline in the prior quarter. Adjusted EBITDA margin was 24.3 percent, compared with 24.9 percent a year earlier.

The global additives and specialty ingredients company said sales volumes rose three percent, led by Life Sciences and Personal Care, after a six percent year-over-year volume increase in the third quarter. Pricing increased two percent, covering raw material cost inflation across all business units. Foreign currency movements reduced sales by approximately $3 million, or one percent, reversing a favorable $3 million contribution in the third quarter.

Net loss was $16 million, or ($0.35) a share, compared with net income of $32 million a year earlier. Loss from continuing operations was $17 million, or ($0.36) a share, compared with income from continuing operations of $33 million, or $0.73 a share. Adjusted Income from Continuing Operations Excluding Intangibles Amortization Expense was $52 million, or $1.12 a share, up from $50 million, or $1.08 a share. Adjusted Operating Income was $77 million, up from $71 million.

Life Sciences sales were $180 million, up four percent from the prior-year quarter, after double-digit sales gains in the third quarter. Pharma sales increased approximately six percent, the sixth consecutive quarter of year-over-year volume growth. Nutrition sales declined slightly due to lower volumes. Life Sciences Adjusted EBITDA was $64 million, up 16 percent from $55 million, and Adjusted EBITDA margin increased 380 basis points to 35.6 percent, which the company said was the highest quarterly margin in the segment’s history. Adjusted Operating Income was $50 million, up from $41 million.

Personal Care sales were $163 million, up eight percent from $151 million, including double-digit growth in biofunctional actives, microbial protection and hair care, and high-single-digit growth in skin care. Adjusted Operating Income was $35 million, up 25 percent from $28 million. Adjusted EBITDA was $49 million, up 14 percent from $43 million, and Adjusted EBITDA margin increased 160 basis points to 30.1 percent.

Specialty Additives sales were $131 million, in line with the prior-year quarter. Coatings sales increased nine percent and Performance Specialties sales increased fourteen percent, which the company said reflected share gains across all regions, including a third consecutive quarter of year-over-year sales growth in China. Those gains were offset by soft end-market demand in Energy and Resources and lower Construction volumes resulting from deliberate portfolio actions. Adjusted Operating Income was $5 million, compared with $12 million. Adjusted EBITDA was $20 million, down 31 percent from $29 million, primarily reflecting lower Hopewell productivity and related unfavorable absorption. The company said key productivity investments are now complete, with the focus on execution to increase production.

Intermediates sales totaled $33 million, in line with the prior-year quarter. Merchant sales increased four percent to $24 million, offset by a $1 million decline in captive sales to $9 million. Adjusted Operating Income was $4 million, compared with $2 million. Adjusted EBITDA was $6 million, up 20 percent from $5 million, and Adjusted EBITDA margin increased 300 basis points to 18.2 percent.

Unallocated and other expense was $44 million, compared with $11 million a year earlier, primarily reflecting higher restructuring charges and a cumulative translation adjustment associated with the liquidation of Ashland’s Argentine entity. Adjusted unallocated and other EBITDA expense was $18 million compared with $13 million.

Cash flows provided by operating activities were $90 million, up from $40 million, driven primarily by lower working capital. Ongoing Free Cash Flow was $74 million versus $52 million, with conversion of 61 percent versus 44 percent.

For full-year fiscal 2026, sales were $1.863 billion, up two percent from $1.824 billion. Excluding the Avoca divestiture, organic sales increased three percent. Net income was $4 million, compared with a net loss of $845 million in fiscal 2025. Income from continuing operations was $25 million, or $0.55 a share, compared with a loss from continuing operations of $822 million, or ($17.74) a share, primarily reflecting the absence of a $706 million goodwill impairment and $175 million Avoca-related impairment and sale adjustment. Full-year Adjusted EBITDA was $385 million, compared with $401 million. Cash flow from operating activities was $385 million, compared with $134 million. Ongoing Free Cash Flow was $232 million, compared with $127 million. Ashland ended the year with approximately $480 million of cash, $976 million of total liquidity and net debt of $891 million; net leverage of 2.3x was within the company’s long-term target range. Globalize generated approximately $26 million of incremental sales, exceeding its fiscal 2026 target of $20 million. Innovate generated approximately $26 million of incremental sales, exceeding its target of $15 million.

Ashland issued full-year fiscal 2027 sales guidance of $1,905 million to $1,975 million, reflecting growth of approximately two to six percent over the prior year, and Adjusted EBITDA guidance of $405 million to $435 million. Ongoing Free Cash Flow Conversion is expected to be greater than 40 percent of Adjusted EBITDA, reflecting a modest increase in inventory and capital expenditures of up to approximately $140 million. The outlook reflects estimated foreign-currency headwinds of approximately $20 million to $25 million to sales and $7 million to $10 million to Adjusted EBITDA based on recent spot rates. Fiscal 2027 strategic targets include approximately $10 million in Execute net incremental productivity and manufacturing optimization benefits, approximately $20 million in Globalize incremental sales, and $45 million in Innovate incremental innovation-driven sales.