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Ashland makes specialty ingredients used in pharmaceuticals, personal care, coatings and other products. Its fiscal 2027 plan targets higher earnings after a year in which commercial growth outperformed selected targets but manufacturing productivity at Hopewell remained below expectations.
Ashland Inc. (NYSE: ASH) makes specialty ingredients for medicines, personal-care products, coatings, construction and other applications. Its four reporting segments are Life Sciences, Personal Care, Specialty Additives and Intermediates. The fiscal year ends September 30.
Q4 covers July through September. Full-year periods end September 30. USD millions, except diluted earnings per share.
| Metric | Q4 2026 | Q4 2025 | FY 2026 | FY 2025 |
|---|---|---|---|---|
| Sales, GAAP | 498 | 478 | 1,863 | 1,824 |
| Operating income, GAAP | 29 | 61 | 105 | (775) |
| Net income, GAAP | (16) | 32 | 4 | (845) |
| Adjusted EBITDA | 121 | 119 | 385 | 401 |
| Adjusted EPS excluding intangible amortization | 1.12 | 1.08 | 3.31 | 3.38 |
| Continuing operating cash flow, GAAP | 90 | 40 | 385 | 134 |
| Ongoing free cash flow | 74 | 52 | 232 | 127 |
Adjusted earnings remove selected restructuring, environmental, plant, impairment, currency and other items. Adjusted EPS also excludes intangible amortization and the related tax effects. The prior year's GAAP net loss included $706 million of goodwill impairment and $175 million of Avoca-related charges.
In July, Ashland kept annual adjusted EBITDA guidance at $385 million to $400 million. The final $385 million met the lower endpoint. It expected low-to-mid-single-digit growth in adjusted EPS excluding intangible amortization; the actual $3.31 was below the prior $3.38.
Group adjusted EBITDA increased from $109 million in Q3 to $121 million in Q4, consistent with the broad sequential improvement expected in July. Specialty Additives stayed at $20 million, while Life Sciences rose from $60 million to $64 million and Personal Care from $45 million to $49 million.
The geographic expansion and innovation programs each generated $26 million of incremental annual sales, ahead of their respective $20 million and $15 million goals.
Specialty Additives quarterly sales were flat at $131 million. Adjusted EBITDA fell to $20 million from $29 million a year earlier. Lower Hopewell productivity and costs spread across lower production outweighed improvements elsewhere in the portfolio. Ashland says the critical productivity investments are complete.
Life Sciences quarterly sales rose to $180 million from $173 million, with adjusted EBITDA of $64 million versus $55 million. Personal Care sales rose to $163 million from $151 million, with adjusted EBITDA of $49 million versus $43 million.
The year runs October 1, 2026 through September 30, 2027. Management forecasts sales of $1.905 billion to $1.975 billion and adjusted EBITDA of $405 million to $435 million.
Strategic targets include $10 million of net incremental productivity benefits, $20 million of geographic expansion sales and $45 million of innovation-driven sales. Expected currency headwinds are $20 million to $25 million of sales and $7 million to $10 million of adjusted EBITDA.
Capital spending is planned at up to approximately $140 million, compared with $88 million in fiscal 2026. Ongoing free cash flow is expected to exceed 40% of adjusted EBITDA, with modest inventory growth included in the plan.
Annual operating cash flow from continuing operations was $385 million. Discontinued operations used $46 million, bringing the whole-company total to $339 million. The comparable prior-year figures were $134 million and a $40 million outflow.
Annual ongoing free cash flow of $232 million starts with $385 million of continuing operating cash less $88 million of capital spending. It removes the $103 million tax refund and $18 million of receivables-program inflows, then adds back $23 million of restructuring payments and $33 million of environmental payments. The environmental payments are reimbursable by a trust. The tax refund was received in October 2025.
Cash was $480 million at September 30, versus $215 million a year earlier. Current and long-term debt totaled $1.371 billion, giving $891 million of net debt. Management reported net leverage of 2.3 times.
Ashland completed the sale of Avoca to Mane in March 2025. The current year's $2 million of sale proceeds relate to that earlier disposal.
The next operating test is whether Hopewell produces more efficiently after the investments, while Life Sciences and Personal Care sustain their commercial gains. The new fiscal-year profit and cash targets provide the financial benchmarks.
Analysis ASH
Ashland met the low end of its annual EBITDA range but missed its EPS growth forecast. Our comparison shows where profit improvement stalled and what the new plan requires.