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Albemarle (ALB) Beats on Q2 Earnings and Sales, Raises FY22 View
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Albemarle Corporation (ALB - Free Report) logged a profit of $406.8 million or $3.46 per share in the second quarter of 2022, down from a profit of $424.6 million or $3.62 per share a year ago.
Adjusted earnings in the reported quarter were $3.45 per share, topping the Zacks Consensus Estimate of $3.03. Our estimate for the quarter was $2.89.
Revenues climbed roughly 91% year over year to $1,479.6 million in the quarter and surpassed the Zacks Consensus Estimate of $1,370.8 million. The figure compares to our estimate of $1,423.7 million.
The top line was driven by higher pricing across the company’s segments on the back of strong demand from diverse end markets.
Albemarle Corporation Price, Consensus and EPS Surprise
Sales from the Lithium unit surged 178% year over year to $891.5 million. This compares to the consensus estimate of $917.9 million and our estimate of $904.9 million. Sales were driven by higher pricing (up 160% net of currency) associated with renegotiated contracts and higher market pricing. Volumes rose 18% in the quarter on the back of the La Negra III/IV expansion in Chile and increased tolling volumes to meet rising customer demand.
The Bromine Specialties segment recorded sales of $377.8 million, up 35% year over year. This compares to the consensus estimate of $335.5 million and our estimate of $374.2 million. Sales were supported by a 31% (net of currency) rise in pricing and 4% higher volume. Tight market conditions led to strong demand and favorable pricing.
The Catalysts unit recorded revenues of $210.3 million in the reported quarter, up 42% year over year. This compares to the consensus estimate of $204 million and our estimate of $144.6 million. Volumes rose 37% while pricing increased 5% (net of currency).
Financial Position
Albemarle ended the quarter with cash and cash equivalents of roughly $930.6 million, up around 13% year over year. Long-term debt was $3,205.7 million, up around 57% year over year.
Cash flow from operations was $60.3 million for the six months ended Jun 30, 2022, down around 84% year over year.
Outlook
Albemarle raised its net sales outlook for 2022 factoring in continued strength in pricing in its Lithium and Bromine businesses. The company envisions net sales for 2022 to be in the band of $7.1-$7.5 billion, up from $5.8-$6.2 billion it expected earlier. Adjusted EBITDA for the year is now forecast to be $3.2-$3.5 billion, up from the prior view of $2.2-$2.5 billion.
Albemarle also sees adjusted earnings per share for 2022 in the band of $19.25-$22.25, up from $12.30-$15.00 it expected earlier.
The company anticipates capital expenditures of $1.3-1.5 billion for 2022. Net cash from operations is projected to be $1.4-$1.7 billion. The company also expects to be free cash flow positive in 2022.
Price Performance
Albemarle’s shares have gained 23.3% in the past year compared with a 9.1% decline of the industry.
Image Source: Zacks Investment Research
Zacks Rank & Other Key Picks
Albemarle currently carries a Zacks Rank #2 (Buy).
Other top-ranked stocks worth considering in the basic materials space include Cabot Corporation (CBT - Free Report) , Sociedad Quimica y Minera de Chile S.A. (SQM - Free Report) and ATI Inc. (ATI - Free Report) .
Cabot, currently carrying a Zacks Rank #1 (Strong Buy), has an expected earnings growth rate of 22.5% for the current fiscal year. The Zacks Consensus Estimate for CBT's earnings for the current fiscal has been revised 0.8% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Cabot’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 16.2%. CBT has gained around 38% over a year.
Sociedad has a projected earnings growth rate of 513.7% for the current year. The Zacks Consensus Estimate for SQM’s current-year earnings has been revised 57.8% upward in the past 60 days.
Sociedad’s earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, the average being 28.2%. SQM has gained roughly 99% in a year. The company sports a Zacks Rank #1.
ATI, currently carrying a Zacks Rank #2, has a projected earnings growth rate of 1,069.2% for the current year. The Zacks Consensus Estimate for ATI's current-year earnings has been revised 12.5% upward in the past 60 days.
ATI’s earnings beat the Zacks Consensus Estimate in the last four quarters. It has a trailing four-quarter earnings surprise of roughly 128.9%, on average. ATI shares are up around 37% in a year.
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Albemarle (ALB) Beats on Q2 Earnings and Sales, Raises FY22 View
Albemarle Corporation (ALB - Free Report) logged a profit of $406.8 million or $3.46 per share in the second quarter of 2022, down from a profit of $424.6 million or $3.62 per share a year ago.
Adjusted earnings in the reported quarter were $3.45 per share, topping the Zacks Consensus Estimate of $3.03. Our estimate for the quarter was $2.89.
Revenues climbed roughly 91% year over year to $1,479.6 million in the quarter and surpassed the Zacks Consensus Estimate of $1,370.8 million. The figure compares to our estimate of $1,423.7 million.
The top line was driven by higher pricing across the company’s segments on the back of strong demand from diverse end markets.
Albemarle Corporation Price, Consensus and EPS Surprise
Albemarle Corporation price-consensus-eps-surprise-chart | Albemarle Corporation Quote
Segment Highlights
Sales from the Lithium unit surged 178% year over year to $891.5 million. This compares to the consensus estimate of $917.9 million and our estimate of $904.9 million. Sales were driven by higher pricing (up 160% net of currency) associated with renegotiated contracts and higher market pricing. Volumes rose 18% in the quarter on the back of the La Negra III/IV expansion in Chile and increased tolling volumes to meet rising customer demand.
The Bromine Specialties segment recorded sales of $377.8 million, up 35% year over year. This compares to the consensus estimate of $335.5 million and our estimate of $374.2 million. Sales were supported by a 31% (net of currency) rise in pricing and 4% higher volume. Tight market conditions led to strong demand and favorable pricing.
The Catalysts unit recorded revenues of $210.3 million in the reported quarter, up 42% year over year. This compares to the consensus estimate of $204 million and our estimate of $144.6 million. Volumes rose 37% while pricing increased 5% (net of currency).
Financial Position
Albemarle ended the quarter with cash and cash equivalents of roughly $930.6 million, up around 13% year over year. Long-term debt was $3,205.7 million, up around 57% year over year.
Cash flow from operations was $60.3 million for the six months ended Jun 30, 2022, down around 84% year over year.
Outlook
Albemarle raised its net sales outlook for 2022 factoring in continued strength in pricing in its Lithium and Bromine businesses. The company envisions net sales for 2022 to be in the band of $7.1-$7.5 billion, up from $5.8-$6.2 billion it expected earlier. Adjusted EBITDA for the year is now forecast to be $3.2-$3.5 billion, up from the prior view of $2.2-$2.5 billion.
Albemarle also sees adjusted earnings per share for 2022 in the band of $19.25-$22.25, up from $12.30-$15.00 it expected earlier.
The company anticipates capital expenditures of $1.3-1.5 billion for 2022. Net cash from operations is projected to be $1.4-$1.7 billion. The company also expects to be free cash flow positive in 2022.
Price Performance
Albemarle’s shares have gained 23.3% in the past year compared with a 9.1% decline of the industry.
Image Source: Zacks Investment Research
Zacks Rank & Other Key Picks
Albemarle currently carries a Zacks Rank #2 (Buy).
Other top-ranked stocks worth considering in the basic materials space include Cabot Corporation (CBT - Free Report) , Sociedad Quimica y Minera de Chile S.A. (SQM - Free Report) and ATI Inc. (ATI - Free Report) .
Cabot, currently carrying a Zacks Rank #1 (Strong Buy), has an expected earnings growth rate of 22.5% for the current fiscal year. The Zacks Consensus Estimate for CBT's earnings for the current fiscal has been revised 0.8% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Cabot’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 16.2%. CBT has gained around 38% over a year.
Sociedad has a projected earnings growth rate of 513.7% for the current year. The Zacks Consensus Estimate for SQM’s current-year earnings has been revised 57.8% upward in the past 60 days.
Sociedad’s earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, the average being 28.2%. SQM has gained roughly 99% in a year. The company sports a Zacks Rank #1.
ATI, currently carrying a Zacks Rank #2, has a projected earnings growth rate of 1,069.2% for the current year. The Zacks Consensus Estimate for ATI's current-year earnings has been revised 12.5% upward in the past 60 days.
ATI’s earnings beat the Zacks Consensus Estimate in the last four quarters. It has a trailing four-quarter earnings surprise of roughly 128.9%, on average. ATI shares are up around 37% in a year.