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Albemarle (ALB) Q3 Earnings and Revenues Trounce Estimates

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Albemarle Corporation (ALB - Free Report) recorded a profit of $98.3 million or 92 cents per share in the third quarter of 2020, down from $155.1 million or $1.46 per share it earned a year ago.

Adjusted earnings for the reported quarter were $1.09 per share, down from $1.53 a year ago. It, however, topped the Zacks Consensus Estimate of 78 cents.

Revenues fell roughly 15% year over year to $746.9 million in the quarter. It surpassed the Zacks Consensus Estimate of $733.5 million. The company saw lower sales across its segments in the quarter.

 

Albemarle Corporation Price, Consensus and EPS Surprise

 

Albemarle Corporation Price, Consensus and EPS Surprise

Albemarle Corporation price-consensus-eps-surprise-chart | Albemarle Corporation Quote

 

Segment Highlights

Sales from the Lithium unit dropped around 20% year over year to $265.6 million in the reported quarter, hurt by lower contract and market pricing. Adjusted EBITDA was down roughly 23% year over year to $97.8 million.

The Bromine Specialties segment recorded sales of $237.2 million, down around 7% year over year. Sales were hurt by reduced volumes due to the impacts of the coronavirus pandemic. Adjusted EBITDA was $79.4 million, down around 10% year over year.

The Catalysts unit recorded revenues of $197.9 million in the reported quarter, down 24% year over year, hurt by lower volumes. Adjusted EBITDA was $37.8 million, down roughly 43% year over year. The company saw lower volumes in Fluid Catalytic Cracking on a year-over-year basis due to reduced transportation fuel consumption. Hydroprocessing Catalysts volumes also fell in the quarter, impacted by lower oil prices and reduced fuel demand.

Financial Position

Albemarle ended the quarter with cash and cash equivalents of roughly $702 million, a more  than two-fold year-over-year rise. Long-term debt more than doubled year over year to around $2,940.5 million.

Cash flow from operations was $461.7 million for the nine months ended Sep 30, 2020, up around 34% year over year.

Outlook

Moving ahead, Albemarle expects its performance for full-year 2020 will be lower on a year-over-year basis on lower global economic activity resulting from the pandemic.

The company expects net sales for 2020 between $3.05 billion and $3.15 billion. Moreover, adjusted EBITDA for the year has been forecast in the range of $780-$810 million.

The company also expects to realize around $80 million of cost savings in 2020, up from its earlier expectation of $50-$70 million.

Price Performance

Albemarle’s shares are up 46.3% over a year compared with a 1.2% decline of its industry.

 

 

Zacks Rank & Key Picks

Albemarle currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks worth considering in the basic materials space include Agnico Eagle Mines Limited (AEM - Free Report) , Barrick Gold Corporation (GOLD - Free Report) and B2Gold Corp. (BTG - Free Report) .

Agnico Eagle has a projected earnings growth rate of 103.1% for the current year. The company’s shares have gained around 34% in a year. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Barrick Gold has an expected earnings growth rate of 100% for the current year. The company’s shares have surged around 62% in the past year. It currently carries a Zacks Rank #2 (Buy).

B2Gold has a projected earnings growth rate of 250% for the current year. The company’s shares have shot up roughly 77% in a year. It currently carries a Zacks Rank #2.

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