It has been about a month since the last earnings report for Albemarle (
ALB Quick Quote ALB - Free Report) . Shares have lost about 4.1% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Albemarle due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Albemarle's Q3 Earnings and Revenues Top Estimates
Albemarle slipped to a net loss of $392.8 million or $3.36 per share in the third quarter of 2021 from a profit of $98.3 million or 92 cents per share a year ago. The loss was attributed to the recent arbitration decision on a dispute regarding Huntsman Corporation's acquisition of Rockwood's Pigments & Additives business in 2014.
Adjusted earnings in the reported quarter were $1.05 per share, down from $1.09 a year ago. The bottom line topped the Zacks Consensus Estimate of 75 cents. Revenues rose roughly 11.2% year over year to $830.6 million in the quarter and topped the Zacks Consensus Estimate of $775.6 million. The top line was aided by higher sales from the company's Lithium and Bromine business segments. Segment Highlights
Sales from the Lithium unit rose around 35.3% year over year to $359.2 million in the reported quarter, aided by higher volumes (up 30%) from tolling to meet growing customer demand and higher pricing and favorable currency swings. Adjusted EBITDA was up roughly 28.2% year over year to $125.4 million, aided by higher sales and volumes at its Talison joint venture.
The Bromine Specialties segment recorded sales of $277.8 million, up around 17.1% year over year. Sales were supported by strong pricing and favorable currency. Prices were driven by high demand across the product portfolio and tightening of the market. Adjusted EBITDA was $86 million, up around 8.3% year over year led by higher sales, offset by higher raw material and freight costs. The Catalysts unit recorded revenues of $193.6 million in the reported quarter, down around 2.2% year over year, hurt by lower volumes (down 1%), pricing and unfavorable currency translation. Adjusted EBITDA was $33.1 million, down roughly 12.5% year over year due to lower sales, partly offset by higher-than-expected equity income. Financial Position
Albemarle ended the quarter with cash and cash equivalents of roughly $595 million, down around 15% year over year. Long-term debt was $2,021.5 million, down around 31.3%.
Cash flow from operations was around $491 million in the nine months ended Sep 30, 2021, up around 6.3% 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 to be between $3.3 billion and $3.4 billion. It sees higher Lithium sales. However, volumes for the Bromine business are expected to be affected by sold-out conditions and the lack of inventory. Higher freight and raw material costs are likely to partially offset the cost saving and higher pricing initiatives in the segment. For the catalysts segment, volumes are not expected to return to the pre-pandemic levels before late 2022 or 2023. Moreover, Albemarle now sees adjusted earnings per share for 2021 in the band of $3.85-$4.15, up from its prior view of $3.35-$3.70. How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. The consensus estimate has shifted 13.47% due to these changes.
At this time, Albemarle has an average Growth Score of C, a grade with the same score on the momentum front. Charting a somewhat similar path, 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 D. If you aren't focused on one strategy, this score is the one you should be interested in.
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.