LyondellBasell Industries N.V. (LYB - Free Report) posted profits of $572 million or $1.75 per share in third-quarter 2022, down from $1,762 million or $5.25 in the year-ago quarter.
Adjusted earnings came in at $1.96 per share in the quarter, missing the Zacks Consensus Estimate of $2.96.
Revenues fell roughly 3.5% year over year to $12,250 million in the reported quarter. The figure missed the consensus mark of $13,279.1 million.
Consolidated EBITDA in the quarter declined around 59% year over year to $1,108 million.
The company faced headwinds from higher energy costs, new supply and softer markets in the quarter. Demand for its products used in consumer packaging remained stable.
However, it saw weaker demand from durable goods markets. Olefins, polyolefins and intermediate chemicals markets witnessed significantly higher energy costs and soft demand in Europe in the reported quarter.
Segment Review
In the Olefins & Polyolefins — Americas division, EBITDA decreased roughly 64% year over year to $559 million in the reported quarter. Olefins’ results fell due to lower margins.
The Olefins & Polyolefins — Europe, Asia, the International segment witnessed a decline in EBITDA of $557 million from the prior-year quarter to a loss of $83 million. Olefins results declined due to reduced margins and volumes. Ethylene margins fell due to higher feedstock and energy costs, partly offset by higher ethylene and co-product prices.
The Advanced Polymer Solutions segment posted an EBITDA of $66 million, down around 45% from the year-ago quarter. Compounding and Solutions results fell due to reduced product prices and higher feedstock costs.
EBITDA in the Intermediates and Derivatives segment increased around 3% on a year-over-year basis to $360 million. Propylene Oxide & Derivatives results declined due to higher energy costs in Europe.
The Refining segment reported an EBITDA of $106 million in the reported quarter, up around 159% from the year-ago quarter.
The Technology segment’s EBITDA was $92 million in the reported quarter, down around 41% year over year. The downside was due to lower licensing revenues.
Financials
LyondellBasell generated $1.4 billion in cash from operating activities during the quarter. The company returned more than $550 million to shareholders through dividends and share repurchases in the reported quarter.
Outlook
The company stated that its diverse business portfolio, strong balance sheet and solid liquidity are enabling it to navigate challenging markets.
Demand from consumer packaging, oxyfuels and refining markets remains strong in October, the company noted. However, inflation and high energy costs along with softer seasonal demand are expected to drive further margin compression across most of LyondellBasell’s businesses in the fourth quarter. The company also expects challenging conditions to continue in European and Asian markets.
Price Performance
Shares of LyondellBasell have declined 11.1% in the past year compared with a 10.8% decline of the industry.
Zacks Rank & Key Picks
LyondellBasell currently carries a Zacks Rank #5 (Strong Sell).
Better-ranked stocks worth considering in the basic materials space include Albemarle Corporation (ALB - Free Report) , Sociedad Quimica y Minera de Chile S.A. (SQM - Free Report) and Ryerson Holding Corporation (RYI - Free Report) .
Albemarle, currently sporting a Zacks Rank #1 (Strong Buy), has a projected earnings growth rate of 430.7% for the current year. The Zacks Consensus Estimate for ALB's current-year earnings has been revised 5.8% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Albemarle’s earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 24.2%, on average. ALB has gained around 13% in a year.
Sociedad has a projected earnings growth rate of 530.7% for the current year. The Zacks Consensus Estimate for SQM’s current-year earnings has been revised 2.1% upward in the past 60 days.
Sociedad has a trailing four-quarter earnings surprise of roughly 27.2%. SQM has rallied roughly 76% in a year. The company currently carries a Zacks Rank #1.
Ryerson Holding, currently carrying a Zacks Rank #1, has an expected earnings growth rate of 74.2% for the current year. The consensus estimate for RYI's earnings for the current year has been revised 3.2% upward in the past 60 days.
Ryerson Holding’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 28.9%. RYI has gained around 29% over a year.
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LyondellBasell Industries N.V. (LYB - Free Report) posted profits of $572 million or $1.75 per share in third-quarter 2022, down from $1,762 million or $5.25 in the year-ago quarter.
Adjusted earnings came in at $1.96 per share in the quarter, missing the Zacks Consensus Estimate of $2.96.
Revenues fell roughly 3.5% year over year to $12,250 million in the reported quarter. The figure missed the consensus mark of $13,279.1 million.
Consolidated EBITDA in the quarter declined around 59% year over year to $1,108 million.
The company faced headwinds from higher energy costs, new supply and softer markets in the quarter. Demand for its products used in consumer packaging remained stable.
However, it saw weaker demand from durable goods markets. Olefins, polyolefins and intermediate chemicals markets witnessed significantly higher energy costs and soft demand in Europe in the reported quarter.
Segment Review
In the Olefins & Polyolefins — Americas division, EBITDA decreased roughly 64% year over year to $559 million in the reported quarter. Olefins’ results fell due to lower margins.
The Olefins & Polyolefins — Europe, Asia, the International segment witnessed a decline in EBITDA of $557 million from the prior-year quarter to a loss of $83 million. Olefins results declined due to reduced margins and volumes. Ethylene margins fell due to higher feedstock and energy costs, partly offset by higher ethylene and co-product prices.
The Advanced Polymer Solutions segment posted an EBITDA of $66 million, down around 45% from the year-ago quarter. Compounding and Solutions results fell due to reduced product prices and higher feedstock costs.
EBITDA in the Intermediates and Derivatives segment increased around 3% on a year-over-year basis to $360 million. Propylene Oxide & Derivatives results declined due to higher energy costs in Europe.
The Refining segment reported an EBITDA of $106 million in the reported quarter, up around 159% from the year-ago quarter.
The Technology segment’s EBITDA was $92 million in the reported quarter, down around 41% year over year. The downside was due to lower licensing revenues.
Financials
LyondellBasell generated $1.4 billion in cash from operating activities during the quarter. The company returned more than $550 million to shareholders through dividends and share repurchases in the reported quarter.
Outlook
The company stated that its diverse business portfolio, strong balance sheet and solid liquidity are enabling it to navigate challenging markets.
Demand from consumer packaging, oxyfuels and refining markets remains strong in October, the company noted. However, inflation and high energy costs along with softer seasonal demand are expected to drive further margin compression across most of LyondellBasell’s businesses in the fourth quarter. The company also expects challenging conditions to continue in European and Asian markets.
Price Performance
Shares of LyondellBasell have declined 11.1% in the past year compared with a 10.8% decline of the industry.
Zacks Rank & Key Picks
LyondellBasell currently carries a Zacks Rank #5 (Strong Sell).
Better-ranked stocks worth considering in the basic materials space include Albemarle Corporation (ALB - Free Report) , Sociedad Quimica y Minera de Chile S.A. (SQM - Free Report) and Ryerson Holding Corporation (RYI - Free Report) .
Albemarle, currently sporting a Zacks Rank #1 (Strong Buy), has a projected earnings growth rate of 430.7% for the current year. The Zacks Consensus Estimate for ALB's current-year earnings has been revised 5.8% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Albemarle’s earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 24.2%, on average. ALB has gained around 13% in a year.
Sociedad has a projected earnings growth rate of 530.7% for the current year. The Zacks Consensus Estimate for SQM’s current-year earnings has been revised 2.1% upward in the past 60 days.
Sociedad has a trailing four-quarter earnings surprise of roughly 27.2%. SQM has rallied roughly 76% in a year. The company currently carries a Zacks Rank #1.
Ryerson Holding, currently carrying a Zacks Rank #1, has an expected earnings growth rate of 74.2% for the current year. The consensus estimate for RYI's earnings for the current year has been revised 3.2% upward in the past 60 days.
Ryerson Holding’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 28.9%. RYI has gained around 29% over a year.
4 Oil Stocks with Massive Upsides
Global demand for oil is through the roof... and oil producers are struggling to keep up. So even though oil prices are well off their recent highs, you can expect big profits from the companies that supply the world with "black gold."
Zacks Investment Research has just released an urgent special report to help you bank on this trend.
In Oil Market on Fire, you'll discover 4 unexpected oil and gas stocks positioned for big gains in the coming weeks and months. You don't want to miss these recommendations.
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