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LyondellBasell (LYB) Earnings and Sales Surpass Estimates in Q2

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LyondellBasell Industries N.V. (LYB - Free Report) posted profits of $2,059 million or $6.13 per share in second-quarter 2021, up from $314 million or 94 cents in the year-ago quarter. Earnings per share topped the Zacks Consensus Estimate of $5.67.

Revenues climbed around 108% year over year to $11,561 million in the reported quarter. The figure also beat the consensus mark of $11,320.6 million.

Consolidated EBITDA for the quarter increased nearly fourfold year over year to $3,018 million.

The company witnessed strong consumer and industrial demand, supported by the ongoing global economic recovery. Strong demand drove price and margins across both of its Olefins and Polyolefins segments in the quarter.

 

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 more than sixfold year over year to $1,576 million in the reported quarter. Olefins results were driven by higher volumes and an increase in margins led by higher ethylene and propylene prices.

The Olefins & Polyolefins — Europe, Asia, International segment witnessed a nearly fourfold year over year rise in EBITDA to $708 million. Combined Polyolefins results were higher due to increased polyethylene and polypropylene price spreads over monomer led by strong demand and tight markets. Olefins results increased due to higher margins and volumes.

The Advanced Polymer Solutions segment posted EBITDA $129 million, compared with a loss of $44 million in the year-ago quarter. Advanced Polymer results rose on higher volumes. Compounding & Solutions results also increased due to higher demand.

EBITDA in the Intermediates and Derivatives segment rose around sixfold on a year-over-year basis to $596 million. Propylene Oxide & Derivatives results rose on strong demand and tight markets. Intermediate Chemicals results also increased due to higher margins. Oxyfuels & Related Products results also went up in the quarter, driven by higher margins on higher demand and gasoline prices.

The Refining segment recorded a loss of $81 million in the reported quarter against a profit of $165 million in the year-ago quarter. The downside was partly caused by lower by-product margins and increased RIN costs.

The Technology segment’s EBITDA was $92 million in the reported quarter, down around 18% year over year. The downside was due to lower licensing revenues and catalyst margins.

Financials

At the end of the quarter, LyondellBasell had cash and cash equivalents of $1,381 million, down around 46% year over year. Long-term debt was $13,482 million, down around 1% year over year.

In the second quarter, it generated $1.9 billion in cash from operations. The company also raised its quarterly dividend by 7.6% to $1.13 per share.

Outlook

The company expects demand for its products and financial results to remain strong moving ahead.  It envisions the rollout of vaccines and the progress of societal reopening globally to support strong worldwide demand for its products in both the manufactured goods and service industries over the coming quarters.

LyondellBasell also expects strong integrated polyethylene margins to continue as its customers look to address order backlogs, rebuild inventories and serve pent-up demand. It also anticipates higher mobility to drive higher demand for gasoline and jet fuel in the second half of 2021, contributing to improved margins in its Oxyfuels & Related Products and Refining businesses.

Price Performance

Shares of LyondellBasell have gained 60.8% in the past year compared with 36.4% rise of the industry.

 

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Zacks Rank & Key Picks

LyondellBasell currently carries a Zacks Rank #1 (Strong Buy).

Other top-ranked stocks worth considering in the basic materials space include Nucor Corporation (NUE - Free Report) , ArcelorMittal (MT - Free Report) and Cabot Corporation (CBT - Free Report) , each sporting a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Nucor has a projected earnings growth rate of 444.9% for the current year. The company’s shares have surged around 147% in a year.

ArcelorMittal has an expected earnings growth rate of 1,484.4% for the current year. The company’s shares have shot up around 220% in the past year.

Cabot has an expected earnings growth rate of around 137.5% for the current fiscal. The company’s shares have gained roughly 51% in the past year.