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LyondellBasell (LYB) Beats Earnings and Sales Estimates in Q4

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LyondellBasell Industries N.V. (LYB - Free Report) posted profits of $855 million or $2.55 per share in fourth-quarter 2020, up from $612 million or $1.83 in the year-ago quarter.

Barring one-time items, adjusted earnings came in at $2.19 cents per share that topped the Zacks Consensus Estimate of $1.31.

Revenues fell 3% year over year to $7,937 million in the reported quarter. However, the figure, beat the consensus mark of $7,154 million.

Consolidated EBITDA increased 20.6% year over year to $1,413 million.

The company witnessed strong consumer-driven demand, industry supply constraints and recovery in durable goods market which reduced the usual year-end slowdown.

LyondellBasell Industries N.V. Price, Consensus and EPS Surprise

 

LyondellBasell Industries N.V. Price, Consensus and EPS Surprise

LyondellBasell Industries N.V. price-consensus-eps-surprise-chart | LyondellBasell Industries N.V. Quote

 

Segment Review

In the Olefins & Polyolefins — Americas division, EBITDA increased 45% year over year to $722 million in the reported quarter. Olefins results were driven by ethylene volumes due to higher demand.

The Olefins & Polyolefins — Europe, Asia, International segment witnessed a rise in EBITDA of 111.1% year over year to $304 million. Olefins results were driven by higher margins and volumes. Polyolefins results were higher due to increased polyolefin volumes and polyethylene margin. This was partly offset by lower polypropylene spread.

The Advanced Polymer Solutions segment posted EBITDA $152 million, up from $54 million in the year-ago quarter. Advanced Polymer results remained the same but Compounding & Solutions results increased due to improved margins.

EBITDA in the Intermediates and Derivatives segment fell 20.4% on a year-over-year basis to $262 million. The downside was caused by LIFO inventory changes.

The Refining segment recorded a loss of $72 million in the reported quarter against a profit of $22 million in the year-ago quarter. The Houston Refinery operated at 53,000 barrels per day lower than prior-year quarter’s levels, thanks to lower demand for refined products.

The Technology segment’s EBITDA fell to $45 million in the reported quarter, down 67.4% year over year. The downside was due to lower licensing revenues.

FY20 Results

Earnings (as reported) for full-year 2020 were $4.24 per share compared with $9.58 per share a year ago. Net sales fell 20% year over year to roughly $27.8 billion.

Financials

At the end of 2020, LyondellBasell had cash and liquid investments of $2.5 billion.

In 2020, the company paid out dividends worth $1.4 billion. It also had 334 million common shares outstanding as of Dec 31,2020.

Outlook

The company noted that improving trends seen last month are continuing in the first quarter of 2021. The Olefins and Polyolefins businesses are witnessing strong margins due to increased export demand to China and Latin America. The company formed a new joint venture this month to build its second world-scale propylene oxide and styrene monomer unit in China.

The company looks forward to debt reduction in the near future. It believes that it is well placed to drive profitability through its growth initiatives, which will increase free cash flow and strengthen its investment grade balance sheet.

Price Performance

Shares of LyondellBasell have gained 4% in the past year compared with 20.9% rise of the industry.

Zacks Rank & Other Key Picks

LyondellBasell currently carries a Zacks Rank #2 (Hold).

Some other top-ranked stocks in the basic materials space are Fortescue Metals Group Limited (FSUGY - Free Report) , BHP Group (BHP - Free Report) and Impala Platinum Holdings Limited (IMPUY - Free Report) .

Fortescue has a projected earnings growth rate of 75.5% for the current fiscal. The company’s shares have surged around 131.7% in a year. It currently sports a Zacks Rank #1(Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

BHP has an expected earnings growth rate of 59.5% for the current fiscal. The company’s shares have gained around 30.8% in the past year. It currently flaunts a Zacks Rank #1.

Impala has an expected earnings growth rate of 189.4% for the current fiscal. The company’s shares have rallied around 41.1% in the past year. It currently sports a Zacks Rank #1.

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