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Albemarle (ALB) to Post Q3 Earnings: What's in the Offing?

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Albemarle Corporation (ALB - Free Report) will release third-quarter 2021 results after the closing bell on Nov 3. The company is likely to have benefited from higher lithium volumes and prices and its cost-reduction actions in the quarter. However, its Bromine Specialties unit is expected to have faced headwinds from input cost inflation and supply-chain issues.

The company beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters. In this timeframe, it delivered an earnings surprise of 22%, on average. It posted an earnings surprise of 7.2% in the last reported quarter.

Albemarle’s shares have rallied 158.7% over a year compared with a 24.1% rise of the industry it belongs to.

 

Zacks Investment ResearchImage Source: Zacks Investment Research



Let’s see how things are shaping up for this announcement.

Zacks Model

Our proven model predicts an earnings beat for Albemarle this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earning beat.

Earnings ESP: Earnings ESP for Albemarle is +8.73%. The Zacks Consensus Estimate for the third quarter is currently pegged at 75 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Albemarle currently carries a Zacks Rank #3.

What do the Estimates Say?

The Zacks Consensus Estimate for revenues for Albemarle for the to-be-reported quarter stands at $776 million, reflecting an increase of around 3.9% from the year-ago quarter.

The Zacks Consensus Estimate for net sales for the Lithium unit stands at $338 million, indicating a 27% year-over-year rise. The same for the Bromine Specialties segment for the third quarter is pegged at $239 million, reflecting an 0.8% increase on a year-over-year basis.
 
The Zacks Consensus Estimate for net sales for the Catalysts segment is pinned at $191 million, indicating a decline of 3.5% year over year.

Some Factors to Watch For

Albemarle is likely to have benefited from higher volumes in its lithium business in the third quarter on continued recovery in global economic activities. Healthy customer orders and plant productivity improvements are like to have supported volumes. Higher lithium prices due to tighter market conditions are also expected to have aided its performance.  

Benefits of the company’s cost-saving and productivity initiatives are also expected to get reflected in the quarter to be reported. The company remains on track with its cost-saving program which is expected to deliver run rate savings of more than $120 million by the end of 2021. Its cost actions are expected to have supported margins in the third quarter.

Its Catalysts unit is also likely to have witnessed improved performance in the quarter to be reported on an improvement in transportation fuel demand globally. However, the results in the Bromine Specialties unit are likely to have been impacted by higher raw material costs as well as logistics and supply-chain disruptions.

 

Albemarle Corporation Price and EPS Surprise

 

Albemarle Corporation Price and EPS Surprise

Albemarle Corporation price-eps-surprise | Albemarle Corporation Quote

 

Stocks That Warrant a Look

Here are some companies in the basic materials space you may want to consider as our model shows they too have the right combination of elements to post an earnings beat this quarter:

The Chemours Company (CC - Free Report) , scheduled to release earnings on Nov 4, has an Earnings ESP of +1.26% and carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Franco-Nevada Corporation (FNV - Free Report) , scheduled to release earnings on Nov 3, has an Earnings ESP of +0.38% and carries a Zacks Rank #3.

Olympic Steel, Inc. (ZEUS - Free Report) , scheduled to release earnings on Nov 4, has an Earnings ESP of +7.08% and carries a Zacks Rank #3.