Back to top

Image: Bigstock

Why Is Albemarle (ALB) Down 3.5% Since the Last Earnings Report?

Read MoreHide Full Article

A month has gone by since the last earnings report for Albemarle Corporation (ALB - Free Report) . Shares have lost about 3.5% in that time frame.

Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Albemarle’s Q2 Earnings Top Estimates, Sales Fall Short

Albemarle recorded profit of $103.3 million or 92 cents per share for the second quarter of 2017 compared with a loss of $314.8 million or $2.78 a year ago. The results in the reported quarter were supported by gains in the company’s Lithium and Advanced Materials division.

Barring one-time items, adjusted earnings for the reported quarter were $1.13 per share, topping the Zacks Consensus Estimate of $1.11.

Revenues rose around 10% year over year to $737.3 million in the reported quarter. Sales in the quarter rose as favorable impacts of pricing and higher sales volume in Lithium and Advanced Materials more than offset the impact of divestitures of specialty chemicals business and minerals-based flame retardants as well as unfavorable currency impact. Sales, however, trailed the Zacks Consensus Estimate of $740.6 million.

Segment Highlights

Sales from the Lithium and Advanced Materials unit jumped 36% year over year to $317.9 million in the reported quarter, supported by favorable pricing, higher sales volumes, partly offset by unfavorable impacts of currency exchange.

The Bromine Specialties segment raked in sales of $203.9 million, down roughly 1% year over year, affected by reduced pricing and unfavorable currency impact.

The Refining Solutions unit reported revenues of $184.2 million in the reported quarter, up around 4% year over year. Sales were driven by higher sales volumes, partly offset by unfavorable impacts of currency swings and pricing.

Financial Position

Albemarle ended the second quarter with cash and cash equivalents of roughly $1 billion, a more than five-fold year-over-year increase. Long-term debt was $1.4 billion, down around 53% year over year.

Outlook

Albemarle reaffirmed its guidance for 2017. The company continues to see full-year net sales of between $2.90 and $3.05 billion, adjusted earnings per share of between $4.20 and $4.40 and adjusted EBITDA of $835-$875 million.

How Have Estimates Been Moving Since Then?

Following the release, investors have witnessed a downward trend for fresh estimates. There have been six revisions lower for the current quarter.

Albemarle Corporation Price and Consensus

 

Albemarle Corporation Price and Consensus | Albemarle Corporation Quote

VGM Scores

At this time, Albemarle's stock has a poor Growth Score of F, however its Momentum is doing a bit better with a D. Following the exact same course, the stock was allocated also a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Our style scores indicate investors will probably be better served looking elsewhere.

Outlook

Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Notably, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Albemarle Corporation (ALB) - free report >>

Published in