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Albemarles (ALB) Q2 Earnings and Revenues Top Estimates

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Albemarle Corporation (ALB - Free Report) recorded a profit of $85.6 million or 80 cents per share in the second quarter of 2020, down from $154.2 million or $1.45 per share it earned a year ago.

Adjusted earnings for the reported quarter were 86 cents per share, down from $1.55 a year ago. It topped the Zacks Consensus Estimate of 72 cents.

Revenues fell roughly 14% year over year to $764 million in the quarter. It surpassed the Zacks Consensus Estimate of $704.3 million. The company saw lower sales across its segments in the quarter.

Albemarle Corporation Price, Consensus and EPS Surprise

 

Albemarle Corporation Price, Consensus and EPS Surprise

Albemarle Corporation price-consensus-eps-surprise-chart | Albemarle Corporation Quote

 

Segment Highlights

Sales from the Lithium unit dropped around 13% year over year to $283.7 million in the reported quarter, hurt by lower contract and market pricing. Adjusted EBITDA was down roughly 33% year over year to $94.5 million.

The Bromine Specialties segment recorded sales of $232.8 million, down around 9% year over year. Sales were affected by reduced volumes due to the impacts of the coronavirus pandemic. Adjusted EBITDA was $73 million, down around 10% year over year.

The Catalysts unit recorded revenues of $197.1 million in the reported quarter, down 26% year over year, hurt by lower volumes. Adjusted EBITDA was $22.8 million, down roughly 66% year over year. The company saw lower volumes in Fluid Catalytic Cracking due to reduced transportation fuel consumption. Hydroprocessing Catalysts volumes also fell in the quarter, impacted by lower oil prices and reduced fuel demand.

Financial Position

Albemarle ended the quarter with cash and cash equivalents of roughly $736.7 million, up roughly 85% year over year. Long-term debt more than doubled year over year to around $3,132.2 million.

Cash flow from operations was $207.9 million for the six months ended Jun 30, 2020, up around 4% year over year.

Outlook

Moving ahead, Albemarle expects its performance in the third quarter of 2020 will be lower on a year-over-year basis on lower global economic activity resulting from the pandemic.

The company expects net sales for the third quarter between $700 million and $775 million. Moreover, adjusted EBITDA for the quarter has been forecast in the range of $140-$190 million.

The company has also accelerated its cost-savings program and expects to realize $50-$70 million of savings this year.

Price Performance

Albemarle’s shares are up 31.1% over a year compared with a 3% decline of its industry.

 

Zacks Rank & Key Picks

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

Better-ranked stocks in the basic materials space include Barrick Gold Corporation (GOLD - Free Report) , Gold Fields Limited (GFI - Free Report) and Eldorado Gold Corporation (EGO - Free Report) .

Barrick Gold has a projected earnings growth rate of 72.6% for the current year. The company’s shares have gained around 65% in a year. It currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Gold Fields has a projected earnings growth rate of 35.7% for the current year. The company’s shares have rallied roughly 128% in a year. It currently carries a Zacks Rank #2.

Eldorado Gold has an expected earnings growth rate of 2,025% for the current year. The company’s shares have shot up around 62% in the past year. It presently carries a Zacks Rank #2.

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