Why Olin Stock Rallied as Much as 11% in Morning Trading Today
Shares of Olin Corporation (NYSE: OLN), a maker of specialty chemicals, jumped as much as 11% in the first hour of trading on March 18. The price jump today, however, actually traces back to Winter Storm Uri, which disrupted the company's business. Here's a quick timeline that helps explain why investors were in a buying mood today.
Earlier in the year Texas was hit with a massive winter storm, called Uri, which caused widespread power outages and disruption. All of Olin's operations in Freeport, Texas, were impacted, with the hit spreading to its businesses in Louisiana, Mississippi, and Alabama. The company "declared Force Majeure on all chemical product shipments from North America." That's not good news. However, the company has hedges in place to protect it from wild swings in energy costs. In fact, on March 16 it announced that it was increasing its first-quarter adjusted EBITDA projections from a range of $400 million to $425 million to a range of $475 million to $500 million. This is likely to be a one-time benefit, but it looks like the company's contingency plans paid off.
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Source Fool.com
