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Albemarle (ALB) Hikes Catalyst Unit Prices on Higher Costs

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Albemarle Corporation (ALB - Free Report) recently announced a price increase for its Catalysts global business unit customers, effective immediately or per contracts.

The decision was taken in the light of the unprecedented global increases in energy costs (gas and electricity) and raw materials vital for manufacturing its performance products.

The surge in energy and raw materials cost is due to several factors, some of which may be temporary. These include the hiked energy costs in Europe due to a winter shortage, the up to 40% increase in the prices of industrial metals and acutely tightened Chlor Alkali markets.

The company noted that through the price hike, it intends to cover the overall increased costs that it is facing through productivity gains and price adjustments for its products and services, and flex with the market over the coming months.

Albemarle’s shares have soared 33.2% over the past year compared with the industry’s 7.3% rise.

Zacks Investment ResearchImage Source: Zacks Investment Research

On its third-quarter earnings call, Albemarle said that it 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 raised its adjusted earnings per share outlook for 2021 to the band of $3.85-$4.15 from its prior view of $3.35-$3.70.

Zacks Rank & Other Key Picks

Albemarle currently carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks from the basic materials space are Orion Engineered Carbons (OEC - Free Report) , Commercial Metals Company (CMC - Free Report) and United States Steel Corporation (X - Free Report) .

Orion flaunts a Zacks Rank #1 (Strong Buy) at present. OEC has an expected earnings growth rate of 27.3% for the current year. The consensus estimate for OEC’s current-year earnings has been revised 6.7% upward over the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.

Orion’s bottom line beat the Zacks Consensus Estimate in all the last four quarters. OEC delivered a trailing four-quarter earnings surprise of 18.24%, on average. The stock has gained 1.9% in a year.

Commercial Metals sports a Zacks Rank of 1 at present. The consensus estimate for CMC's current fiscal-year earnings has been revised 6.6% upward over the past 60 days.

Commercial Metals’ bottom line beat the Zacks Consensus Estimate in three of the last four quarters while the same missed the mark once. CMC delivered a trailing four-quarter earnings surprise of 7.4%, on average. CMC has rallied around 64.4% in a year.

United States Steel currently carries a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for X's current-year earnings has been revised 5.9% upward over the past 60 days.

United States Steel’s bottom line beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 24.5%. The stock has gained 11.5% in a year.