We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Albemarle (ALB) Q1 Earnings Preview: A Beat in the Cards?
Read MoreHide Full Article
Albemarle Corporation (ALB - Free Report) will release its first-quarter 2017 results after the bell on May 3.
The chemical maker’s adjusted earnings of 78 cents per share for fourth-quarter 2016 topped the Zacks Consensus Estimate of 75 cents. Revenues of $696.7 million also beat the Zacks Consensus Estimate of $599.8 million.
Albemarle has an impressive earnings surprise history. It has outpaced the Zacks Consensus Estimate in each of the trailing four quarters, delivering a positive average earnings surprise of 14.28%.
Let’s see how things are shaping up for this announcement.
Our proven model shows that Albemarle is likely to beat earnings because it has the right combination of the two key ingredients.
Zacks ESP: The Earnings ESP for Albemarle is +1.05% as the Most Accurate Estimate stands at 96 cents while the Zacks Consensus Estimate is pegged at 95 cents. A favorable Zacks ESP serves as a meaningful and leading indicator of a likely positive earnings surprise.
Zacks Rank: Albemarle currently carries a Zacks Rank #3 (Hold). Note that stocks with a Zacks Rank of #1 (Strong Buy), 2 (Buy) or 3 have a significantly higher chance of beating earnings. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Conversely, sell-rated stocks (#4 or 5) should never be considered going into an earnings announcement.
The combination of Albemarle’s Zacks Rank #3 and positive ESP makes us reasonably confident of an earnings beat.
Factors to Consider
Albemarle, in its fourth-quarter 2016 call, noted that its performance in 2016 and strategic initiatives have positioned it for strong growth in 2017. Albemarle sees net sales of $2.8-$2.95 billion and adjusted earnings per share of $4.00-$4.25 for 2017, reflecting an increase from sales of around $2.7 billion and adjusted earnings of $3.57 per share it registered in 2016.
Moreover, the company expects adjusted EBITDA for 2017 to be between $800 million and $840 million, also higher than $758.2 million logged in 2016.
Albemarle remains focused on strengthening its lithium business. It is well placed to leverage strong expected growth in the battery-grade lithium market. The company recently said that its Talison joint venture in Australia has approved the expansion of lithium concentrate production at its Greenbushes mine. The expansion will more than double the lithium carbonate equivalent capacity at Greenbushes from 80,000 metric tons per year to more than 160,000 metric tons.
Moreover, the acquisition of the lithium assets of Jiangxi Jiangli New Materials Science and Technology Co. Ltd. has allowed Albemarle to supply premium lithium salts to an expanded global customer base and accelerated the company’s ability to meet its goal of capturing 50% of the growth in the lithium industry.
Albemarle is also selling non-core businesses and assets to boost growth opportunities and focus on its core bromine, lithium, catalysts and surface treatment businesses. As part of this move, the company has sold its Chemetall Surface Treatment unit to German chemical giant BASF (BASFY - Free Report) for around $3.2 billion. The sale is a part of Albemarle's sustained commitment to boost shareholder value by investing in the growth of its high priority businesses.
Albemarle has significantly outperformed the Zacks categorized Chemicals-Diversified industry over a year, partly reflecting its forecast-topping earnings performance and its strategic growth initiatives. The company’s shares have gained around 60.3% over this period, compared with roughly 15.8% gain recorded by the industry.
However, Albemarle sees additional costs in its lithium business in 2017 related to the expanded quota in Chile, additional personnel costs and expenses associated with development of potential new lithium resources. The company expects these to result in $60 million to $70 million of additional costs in 2017.
The company also expects its capital expenditure to rise significantly year over year in 2017. It sees capital spending to rise to $350 million to $400 million in 2017 from roughly $197 million in 2016 with most of the increase will be due to spending related to growth initiatives in the lithium business including the expansion of the Jiangxi Jiangli conversion assets in China and ramp up of volumes at La Negra. The company also expects its free cash flows (on a reported basis) in 2017 to be unfavorably impacted by tax payments of around $275 million related to the sale of the Chemetall business.
Other Stocks to Consider
Here are some stocks in the chemicals space that you may want to consider, as our model shows they have the right combination of elements to post an earnings beat this quarter:
Westlake Chemical Corporation (WLK - Free Report) has an Earnings ESP of +1.25% and carries a Zacks Rank #3.
Sell These Stocks. Now
Just released, today's 220 Zacks Rank #5 Strong Sells demand urgent attention. If any are lurking in your portfolio or Watch List, they should be removed immediately. These are sinister companies because many appear to be sound investments. However, from 1988 through 2016, stocks from our Strong Sell list have actually performed 6X worse than the S&P 500. See today's Zacks "Strong Sells" absolutely free >>.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Albemarle (ALB) Q1 Earnings Preview: A Beat in the Cards?
Albemarle Corporation (ALB - Free Report) will release its first-quarter 2017 results after the bell on May 3.
The chemical maker’s adjusted earnings of 78 cents per share for fourth-quarter 2016 topped the Zacks Consensus Estimate of 75 cents. Revenues of $696.7 million also beat the Zacks Consensus Estimate of $599.8 million.
Albemarle has an impressive earnings surprise history. It has outpaced the Zacks Consensus Estimate in each of the trailing four quarters, delivering a positive average earnings surprise of 14.28%.
Let’s see how things are shaping up for this announcement.
Albemarle Corporation Price and EPS Surprise
Albemarle Corporation Price and EPS Surprise | Albemarle Corporation Quote
Earnings Whispers
Our proven model shows that Albemarle is likely to beat earnings because it has the right combination of the two key ingredients.
Zacks ESP: The Earnings ESP for Albemarle is +1.05% as the Most Accurate Estimate stands at 96 cents while the Zacks Consensus Estimate is pegged at 95 cents. A favorable Zacks ESP serves as a meaningful and leading indicator of a likely positive earnings surprise.
Zacks Rank: Albemarle currently carries a Zacks Rank #3 (Hold). Note that stocks with a Zacks Rank of #1 (Strong Buy), 2 (Buy) or 3 have a significantly higher chance of beating earnings. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Conversely, sell-rated stocks (#4 or 5) should never be considered going into an earnings announcement.
The combination of Albemarle’s Zacks Rank #3 and positive ESP makes us reasonably confident of an earnings beat.
Factors to Consider
Albemarle, in its fourth-quarter 2016 call, noted that its performance in 2016 and strategic initiatives have positioned it for strong growth in 2017. Albemarle sees net sales of $2.8-$2.95 billion and adjusted earnings per share of $4.00-$4.25 for 2017, reflecting an increase from sales of around $2.7 billion and adjusted earnings of $3.57 per share it registered in 2016.
Moreover, the company expects adjusted EBITDA for 2017 to be between $800 million and $840 million, also higher than $758.2 million logged in 2016.
Albemarle remains focused on strengthening its lithium business. It is well placed to leverage strong expected growth in the battery-grade lithium market. The company recently said that its Talison joint venture in Australia has approved the expansion of lithium concentrate production at its Greenbushes mine. The expansion will more than double the lithium carbonate equivalent capacity at Greenbushes from 80,000 metric tons per year to more than 160,000 metric tons.
Moreover, the acquisition of the lithium assets of Jiangxi Jiangli New Materials Science and Technology Co. Ltd. has allowed Albemarle to supply premium lithium salts to an expanded global customer base and accelerated the company’s ability to meet its goal of capturing 50% of the growth in the lithium industry.
Albemarle is also selling non-core businesses and assets to boost growth opportunities and focus on its core bromine, lithium, catalysts and surface treatment businesses. As part of this move, the company has sold its Chemetall Surface Treatment unit to German chemical giant BASF (BASFY - Free Report) for around $3.2 billion. The sale is a part of Albemarle's sustained commitment to boost shareholder value by investing in the growth of its high priority businesses.
Albemarle has significantly outperformed the Zacks categorized Chemicals-Diversified industry over a year, partly reflecting its forecast-topping earnings performance and its strategic growth initiatives. The company’s shares have gained around 60.3% over this period, compared with roughly 15.8% gain recorded by the industry.
However, Albemarle sees additional costs in its lithium business in 2017 related to the expanded quota in Chile, additional personnel costs and expenses associated with development of potential new lithium resources. The company expects these to result in $60 million to $70 million of additional costs in 2017.
The company also expects its capital expenditure to rise significantly year over year in 2017. It sees capital spending to rise to $350 million to $400 million in 2017 from roughly $197 million in 2016 with most of the increase will be due to spending related to growth initiatives in the lithium business including the expansion of the Jiangxi Jiangli conversion assets in China and ramp up of volumes at La Negra. The company also expects its free cash flows (on a reported basis) in 2017 to be unfavorably impacted by tax payments of around $275 million related to the sale of the Chemetall business.
Other Stocks to Consider
Here are some stocks in the chemicals space that you may want to consider, as our model shows they have the right combination of elements to post an earnings beat this quarter:
The Chemours Company (CC - Free Report) has an Earnings ESP of +4.08% and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Westlake Chemical Corporation (WLK - Free Report) has an Earnings ESP of +1.25% and carries a Zacks Rank #3.
Sell These Stocks. Now
Just released, today's 220 Zacks Rank #5 Strong Sells demand urgent attention. If any are lurking in your portfolio or Watch List, they should be removed immediately. These are sinister companies because many appear to be sound investments. However, from 1988 through 2016, stocks from our Strong Sell list have actually performed 6X worse than the S&P 500. See today's Zacks "Strong Sells" absolutely free >>.