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LyondellBasell (LYB) Tops Earnings & Sales Estimates in Q2

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LyondellBasell Industries N.V.’s (LYB - Free Report) net profits rose 46.4% year over year to $1,654 million or $4.22 per share in second-quarter 2018 from $1,130 million or $2.81 in the prior-year quarter.

Barring one-time items, adjusted earnings came in at $3.34 per share, which surpassed the Zacks Consensus Estimate of $2.90.

The company posted revenues of $10,206 million, up roughly 21.5% year over year. The figure beat the Zacks Consensus Estimate of $9,111.1 million.

Consolidated EBITDA rose around 2% year over year to $2,010 million.

Segment Review

In the Olefins & Polyolefins — Americas division, EBITDA fell around 18.5% year over year to $700 million. Olefin results declined roughly $345 million year over year due to a fall in ethylene margin. Polyolefins results increased around $180 million, mainly driven by polyethylene spread improvements.

The Olefins & Polyolefins — Europe, Asia, International segment witnessed a decline in EBITDA of around 36.1% year over year to $447 million. Olefin results fell roughly $145 million on a year-over-year basis. Consolidated polyolefins results declined around $80 million, mainly due to lower polyolefin spreads that was partly offset by increased sales volumes.

EBITDA in the Intermediates and Derivatives segment went up nearly two-fold on a year-over-year basis to $642 million. The same in the Refining segment totaled $104 million, increasing more than four-fold. Crude throughput fell 6,000 barrels per day in the quarter under review.

The Technology segment’s EBITDA surged 135.4% year over year to $113 million.

Financials

As of Jun 30, 2018, LyondellBasell had cash and liquid investments of $3.9 billion.

LyondellBasell repurchased 3.2 million shares with 390 million shares outstanding at the end of the quarter. The company paid dividend worth $392 million in the second quarter.

Outlook

LyondellBasell stated that it is well-positioned to boost earnings over the upcoming quarters on the back of operational and market improvements in Refining, strong performance in Intermediates and Derivatives, the A. Schulman buyout and the start-up of Hyperzone HDPE plant in 2019. Earnings are expected to benefit from increased profits in its refinery, which is likely to be driven by the impact of new marine fuel regulations in second-half 2019.

Price Performance

Shares of LyondellBasell have increased 3.5% over the past three months compared with the industry’s 3.4% rise.



Zacks Rank & Stocks to Consider

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

A few better-ranked stocks in the basic materials space are KMG Chemicals, Inc , Ingevity Corporation (NGVT - Free Report) and Celanese Corporation (CE - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

KMG Chemicals has an expected long-term earnings growth rate of 28.5%. Its shares have returned 41.4% in a year.

Ingevity has an expected long-term earnings growth rate of 12%. Its shares have rallied 60.6% in a year.

Celanese has an expected long-term earnings growth rate of 10%. Its shares have gained 17.9% in a year.

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