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Albemarle (ALB) Tops Earnings and Revenue Estimates in Q4

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Albemarle Corporation (ALB - Free Report) recorded a profit of $84.6 million or 79 cents per share in the fourth quarter of 2020, down from $90.4 million or 85 cents per share it earned a year ago.

Adjusted earnings for the reported quarter were $1.17 per share, down from $1.73 a year ago. It, however, topped the Zacks Consensus Estimate of $1.15.

Revenues fell roughly 11% year over year to $879.1 million in the quarter. It surpassed the Zacks Consensus Estimate of $876.2 million. Lower sales across Catalysts and Lithium segments were partly offset by gains in Bromine and other segments. The company also benefited from its cost-savings initiatives.

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 $358.6 million in the reported quarter, hurt by lower contract and market pricing. Adjusted EBITDA was down roughly 13% year over year to $122.1 million.

The Bromine Specialties segment recorded sales of $263.4 million, up around 8% year over year. Sales were supported by a recovery in demand following the coronavirus-led slowdown. Adjusted EBITDA was $87.9 million, up around 10% year over year.

The Catalysts unit recorded revenues of $195.7 million in the reported quarter, down around 31% year over year. Adjusted EBITDA was $22.1 million, down roughly 71% 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 reduced fuel demand.

FY20 Results

Earnings (as reported) for full-year 2020 were $3.52 per share, compared with earnings of $5.02 per share a year ago. Revenues dropped roughly 13% year over year to $3,128.9 million for the full year.

Financial Position

Albemarle ended 2020 with cash and cash equivalents of roughly $746.7 million, up 22% year over year. Long-term debt was $2,767.4 million, down around 3% year over year.

Cash flow from operations was $798.9 million for full-year 2020, up around 11% year over year.

Outlook

Moving ahead, Albemarle expects its performance for full-year 2021 to improve modestly on a year-over-year basis on a sustained recovery in global economic activities.

The company expects net sales for 2021 between $3.2 billion and $3.3 billion. Moreover, adjusted EBITDA for the year has been forecast in the range of $810-$860 million. Albemarle also sees adjusted earnings per share in the band of $3.25 to $3.65 for 2021.

Albemarle also realized around $80 million of sustainable cost savings in 2020. It expects sustainable cost savings to reach a run-rate of more than $120 million by 2021.

Price Performance

Albemarle’s shares are up 77.6% over a year compared with a 20.4% rise of its industry.

 

Zacks Rank & Key Picks

Albemarle currently carries a Zacks Rank #3 (Hold)

Better-ranked stocks worth considering in the basic materials space include Impala Platinum Holdings Limited (IMPUY - Free Report) , Fortescue Metals Group Limited (FSUGY - Free Report) and Gold Fields Limited (GFI - Free Report) .

Impala Platinum has an expected earnings growth rate of 195.9% for the current fiscal. The company’s shares have rallied around 43% in the past year. It currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Fortescue has a projected earnings growth rate of 78.4% for the current fiscal. The company’s shares have surged around 153% in a year. It currently sports a Zacks Rank #2 (Buy).

Gold Fields has a projected earnings growth rate of 202.4% for the current year. The company’s shares are up around 28% in a year. It currently carries a Zacks Rank #2.

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