Solstice Advanced Materials (NASDAQ:SOLS) fell more than 4% on Wednesday after the company issued full-year revenue guidance that came in below Wall Street expectations, despite reporting first-quarter results broadly in line with forecasts.
The specialty materials producer posted adjusted earnings per share of $0.63 for the quarter, matching analyst consensus estimates.
Revenue increased 10% year over year to $991 million, supported by strong growth across its Nuclear, Electronic Materials and Refrigerants businesses.
Full-year revenue forecast disappoints investors
Solstice projected full-year revenue between $3.9 billion and $4.1 billion.
The midpoint of $4.0 billion fell below analyst expectations of $4.052 billion, representing a shortfall of roughly 1.3%.
For the second quarter, however, the company forecast revenue between $1.06 billion and $1.1 billion.
The midpoint of $1.08 billion came in slightly above consensus estimates of $1.052 billion.
EBITDA and EPS guidance maintained
The company reaffirmed its full-year adjusted EBITDA guidance in a range of $975 million to $1.025 billion.
Adjusted earnings-per-share guidance was also maintained between $2.45 and $2.75.
“Solstice delivered a strong start to 2026, with results ahead of our first-quarter outlook and continued momentum in our highest-growth platforms,” said David Sewell, president and chief executive officer of the company.
“Demand in Nuclear, Electronic Materials and Refrigerants remains robust, reinforcing our confidence in the secular growth trends driving our business.”
Refrigerants and specialty materials drive growth
The Refrigerants & Applied Solutions division generated revenue of $711 million during the quarter, representing year-over-year growth of 12%.
Meanwhile, the Electronic & Specialty Materials segment reported revenue of $281 million, up 7% from the prior year.
Margins pressured by transition costs and R&D spending
Adjusted EBITDA remained flat year over year at $249 million.
Adjusted EBITDA margin declined by 277 basis points to 25.1%, mainly due to the company’s transition toward low global warming potential refrigerants and increased research and development spending.
Cash flow remains strong
Solstice generated operating cash flow of $199 million during the quarter, while free cash flow totaled $124 million.