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Albemarle (ALB) Up 24.9% Since Last Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for Albemarle (ALB - Free Report) . Shares have added about 24.9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Albemarle due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Albemarle’s Q3 Earnings and Revenues Trounce Estimates
Albemarle recorded a profit of $98.3 million or 92 cents per share in the third quarter of 2020, down from $155.1 million or $1.46 per share it earned a year ago.
Adjusted earnings for the reported quarter were $1.09 per share, down from $1.53 a year ago. It, however, topped the Zacks Consensus Estimate of 78 cents.
Revenues fell roughly 15% year over year to $746.9 million in the quarter. It surpassed the Zacks Consensus Estimate of $733.5 million. The company saw lower sales across its segments in the quarter.
Segment Highlights
Sales from the Lithium unit dropped around 20% year over year to $265.6 million in the reported quarter, hurt by lower contract and market pricing. Adjusted EBITDA was down roughly 23% year over year to $97.8 million.
The Bromine Specialties segment recorded sales of $237.2 million, down around 7% year over year. Sales were hurt by reduced volumes due to the impacts of the coronavirus pandemic. Adjusted EBITDA was $79.4 million, down around 10% year over year.
The Catalysts unit recorded revenues of $197.9 million in the reported quarter, down 24% year over year, hurt by lower volumes. Adjusted EBITDA was $37.8 million, down roughly 43% year over year. The company saw lower volumes in Fluid Catalytic Cracking on a year-over-year basis 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 $702 million, a more than two-fold year-over-year rise. Long-term debt more than doubled year over year to around $2,940.5 million.
Cash flow from operations was $461.7 million for the nine months ended Sep 30, 2020, up around 34% year over year.
Outlook
Moving ahead, Albemarle expects its performance for full-year 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 2020 between $3.05 billion and $3.15 billion. Moreover, adjusted EBITDA for the year has been forecast in the range of $780-$810 million.
The company also expects to realize around $80 million of cost savings in 2020, up from its earlier expectation of $50-$70 million.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month. The consensus estimate has shifted 28.23% due to these changes.
VGM Scores
At this time, Albemarle has an average Growth Score of C, however its Momentum Score is doing a lot better with an A. However, the stock was allocated 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 C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Albemarle has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Albemarle (ALB) Up 24.9% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Albemarle (ALB - Free Report) . Shares have added about 24.9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Albemarle due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Albemarle’s Q3 Earnings and Revenues Trounce Estimates
Albemarle recorded a profit of $98.3 million or 92 cents per share in the third quarter of 2020, down from $155.1 million or $1.46 per share it earned a year ago.
Adjusted earnings for the reported quarter were $1.09 per share, down from $1.53 a year ago. It, however, topped the Zacks Consensus Estimate of 78 cents.
Revenues fell roughly 15% year over year to $746.9 million in the quarter. It surpassed the Zacks Consensus Estimate of $733.5 million. The company saw lower sales across its segments in the quarter.
Segment Highlights
Sales from the Lithium unit dropped around 20% year over year to $265.6 million in the reported quarter, hurt by lower contract and market pricing. Adjusted EBITDA was down roughly 23% year over year to $97.8 million.
The Bromine Specialties segment recorded sales of $237.2 million, down around 7% year over year. Sales were hurt by reduced volumes due to the impacts of the coronavirus pandemic. Adjusted EBITDA was $79.4 million, down around 10% year over year.
The Catalysts unit recorded revenues of $197.9 million in the reported quarter, down 24% year over year, hurt by lower volumes. Adjusted EBITDA was $37.8 million, down roughly 43% year over year. The company saw lower volumes in Fluid Catalytic Cracking on a year-over-year basis 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 $702 million, a more than two-fold year-over-year rise. Long-term debt more than doubled year over year to around $2,940.5 million.
Cash flow from operations was $461.7 million for the nine months ended Sep 30, 2020, up around 34% year over year.
Outlook
Moving ahead, Albemarle expects its performance for full-year 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 2020 between $3.05 billion and $3.15 billion. Moreover, adjusted EBITDA for the year has been forecast in the range of $780-$810 million.
The company also expects to realize around $80 million of cost savings in 2020, up from its earlier expectation of $50-$70 million.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month. The consensus estimate has shifted 28.23% due to these changes.
VGM Scores
At this time, Albemarle has an average Growth Score of C, however its Momentum Score is doing a lot better with an A. However, the stock was allocated 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 C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Albemarle has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.