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Methanex (MEOH) Up 4.5% Since Last Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for Methanex (MEOH - Free Report) . Shares have added about 4.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Methanex due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Methanex’s Earnings and Revenues Miss Estimates in Q4
Methanex logged a profit (attributable to shareholders) of $201 million or $2.51 per share in fourth-quarter 2021 versus a loss of $27 million or 35 cents per share in the year-ago quarter.
Adjusted earnings per share (barring one-time items) in the reported quarter were $2.43, missing the Zacks Consensus Estimate of $2.56.
Revenues rose around 54.4% year over year to $1,252.7 million in the quarter. However, the top line missed the Zacks Consensus Estimate of $1,299 million.
Adjusted EBITDA in the reported quarter surged 150% year over year to $340 million.
Operational Highlights
Production in the quarter totaled 1,933,000 tons, up around 20.3% year over year. Total sales volume for the fourth quarter was 2,804,000 tons, lower than the prior-year quarter’s figure of 2,868,000 tons.
The average realized price for methanol was $445 per ton in the quarter, up roughly 57.8% from $282 per ton in the prior-year quarter. In the fourth quarter, the strong fundamentals of the methanol industry, high levels of production and strong execution enabled Methanex to deliver one of the strongest operational and financial performances in its history, the company noted.
Full Year Results
Adjusted earnings for full-year 2021 were $6.03 per share against a loss of $1.62 per share a year ago. Net sales increased 66.6% year over year to $4,415 million.
Financials
Cash and cash equivalents increased around 11.9% year-over-year to $932 million at the end of the fourth quarter. The long-term debt at the end of the fourth quarter was $2,146.4 million, down around 7.6% year over year.
Cash flow from operating activities was $283 million, up around 191.7% year over year. The company paid out dividends worth $9 million during the reported quarter.
Outlook
Methanex forecasts production for 2022 to be roughly 1.5 million tons in New Zealand. It expects adequate gas to operate both Chile plants through the southern hemisphere summer months to the end of April 2022. The company projects production in 2022 to be roughly 1 million tons in Chile. The construction of the Geismar 3 project is progressing according to plan and is on track to be completed on-time and budget by late 2023 or early 2024.
The company stated that its capital allocation priorities remain the same. It is well placed to maintain its business, execute attractive growth opportunities and continue the long track record of returning excess cash to shareholders through dividend payouts and share repurchases.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -12.56% due to these changes.
VGM Scores
Currently, Methanex has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Methanex has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Methanex (MEOH) Up 4.5% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Methanex (MEOH - Free Report) . Shares have added about 4.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Methanex due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Methanex’s Earnings and Revenues Miss Estimates in Q4
Methanex logged a profit (attributable to shareholders) of $201 million or $2.51 per share in fourth-quarter 2021 versus a loss of $27 million or 35 cents per share in the year-ago quarter.
Adjusted earnings per share (barring one-time items) in the reported quarter were $2.43, missing the Zacks Consensus Estimate of $2.56.
Revenues rose around 54.4% year over year to $1,252.7 million in the quarter. However, the top line missed the Zacks Consensus Estimate of $1,299 million.
Adjusted EBITDA in the reported quarter surged 150% year over year to $340 million.
Operational Highlights
Production in the quarter totaled 1,933,000 tons, up around 20.3% year over year. Total sales volume for the fourth quarter was 2,804,000 tons, lower than the prior-year quarter’s figure of 2,868,000 tons.
The average realized price for methanol was $445 per ton in the quarter, up roughly 57.8% from $282 per ton in the prior-year quarter. In the fourth quarter, the strong fundamentals of the methanol industry, high levels of production and strong execution enabled Methanex to deliver one of the strongest operational and financial performances in its history, the company noted.
Full Year Results
Adjusted earnings for full-year 2021 were $6.03 per share against a loss of $1.62 per share a year ago. Net sales increased 66.6% year over year to $4,415 million.
Financials
Cash and cash equivalents increased around 11.9% year-over-year to $932 million at the end of the fourth quarter. The long-term debt at the end of the fourth quarter was $2,146.4 million, down around 7.6% year over year.
Cash flow from operating activities was $283 million, up around 191.7% year over year. The company paid out dividends worth $9 million during the reported quarter.
Outlook
Methanex forecasts production for 2022 to be roughly 1.5 million tons in New Zealand. It expects adequate gas to operate both Chile plants through the southern hemisphere summer months to the end of April 2022. The company projects production in 2022 to be roughly 1 million tons in Chile. The construction of the Geismar 3 project is progressing according to plan and is on track to be completed on-time and budget by late 2023 or early 2024.
The company stated that its capital allocation priorities remain the same. It is well placed to maintain its business, execute attractive growth opportunities and continue the long track record of returning excess cash to shareholders through dividend payouts and share repurchases.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -12.56% due to these changes.
VGM Scores
Currently, Methanex has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Methanex has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.