Methanex (MEOH) Q2 Earnings Miss Estimates, Sales Up Y/Y

Zacks Equity Research Published on July 31, 2017

Chemical maker Methanex Corporation (MEOH - Free Report) recorded net profit (attributable to Methanex shareholders) of $84 million or 89 cents per share in the second quarter of 2017 against a loss of $3 million or 8 cents logged a year ago and a profit of $132 million or $1.46 per share in the first quarter of 2017.

Earnings declined on a sequential basis due to a decrease in average realized methanol price during the second quarter.

Adjusted (barring one-time items) earnings per share for the reported quarter was 85 cents per share, missing the Zacks Consensus Estimate of $1.19 per share.

Adjusted EBITDA in the quarter was $174 million compared with $38 million in the prior-year quarter.

Production for the second quarter was 1,614,000 tons compared with 1,770,000 tons in the year-ago period.

Revenues rose roughly 42.9% year over year to $669 million in the reported quarter.

Methanex Corporation Price, Consensus and EPS Surprise

Financials

Cash flows from operating activities in the second quarter were $250 million compared with $34 million for the prior-year quarter. Cash and cash equivalents were $361.3 million in the second quarter of 2017, up 34.3% year over year. Long-term debt was around $1.53 billion, up roughly 2% year over year.

Outlook

Methanex expects global methanol prices to stabilize in the third quarter. The company expects EBITDA to decline sequentially in the third quarter.

Price Performance

Methanex’s shares lost 1.4% in the last three months, outperforming the industry’s gain of 4.2%.

Zacks Rank & Key Picks

Methanex currently carries a Zacks Rank #5 (Strong Sell).

Some better-ranked companies in the basic material space include Akzo Nobel N.V. (AKZOY - Free Report) , Arkema S.A. (ARKAY - Free Report) and Hitachi Chemical . All three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Akzo Nobel has expected long-term earnings growth of 11.1%.

Arkema has expected long-term earnings growth of 12.4%.

Hitachi Chemical has expected long-term earnings growth of 5%.

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