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Methanex (MEOH) Earnings Beat, Revenues Miss Estimates in Q1

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Methanex Corporation (MEOH - Free Report) logged a profit (attributable to shareholders) of $119 million or $1.60 per share in first-quarter 2022 versus $105 million or $1.19 per share in the year-ago quarter.

Adjusted earnings per share (barring one-time items) in the reported quarter were $2.16, beating the Zacks Consensus Estimate of $2.09.

Revenues rose around 15.7% year over year to $1,176 million in the quarter. However, the top line missed the Zacks Consensus Estimate of $1,178.7 million.

Adjusted EBITDA in the reported quarter surged 39.3% year over year to $337 million.

 

Operational Highlights

Production in the quarter totaled 1,789,000 tons, up around 12.1% year over year. Total sales volume in the first quarter totaled 2,758,000 tons, lower than the prior-year quarter’s figure of 2,793,000 tons.

The average realized price for methanol was $425 per ton in the quarter, up roughly 17.1% from $363 per ton in the prior-year quarter. In the first quarter, the company enjoyed strong industry conditions. Methanex’s impressive financial performance enabled it to return excess cash to shareholders through its raised dividend and increased share repurchase program.

Financials

Cash and cash equivalents increased around 31.4% year-over-year to $1,125 million at the end of the first quarter. The long-term debt at the end of the quarter was $2,144 million, down around 7% year over year.

Cash flow from operating activities was $325 million, up around 94.6% 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 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 within budget by late 2023 or early 2024.

Price Performance

Shares of Methanex have increased 31% in the past year against a 7.5% decline of the industry.

Zacks Investment Research
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Zacks Rank & Key Picks

Methanex currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space are The Mosaic Company (MOS - Free Report) , AdvanSix Inc. (ASIX - Free Report) and Allegheny Technologies Incorporated (ATI - Free Report) .

Mosaic has a projected earnings growth rate of 143.5% for the current year. The Zacks Consensus Estimate for MOS' current-year earnings has been revised 39.7% upward in the past 60 days.

Mosaic’s earnings beat the Zacks Consensus Estimate in three of the last four quarters, while missing once. It delivered a trailing four-quarter earnings surprise of roughly 3.7%, on average. MOS has rallied around 78.6% in a year and currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

AdvanSix has a projected earnings growth rate of 54.7% for the current year. The Zacks Consensus Estimate for ASIX’s current-year earnings has been revised 43.6% upward in the past 60 days.

AdvanSix’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, the average being 23.6%. ASIX has surged 47.3% in a year. The company sports a Zacks Rank #1.

Allegheny, currently sporting a Zacks Rank #1, has an expected earnings growth rate of 707.7% for the current year. The Zacks Consensus Estimate for ATI's earnings for the current year has been revised 6.1% upward in the past 60 days.

Allegheny’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 127.2%. ATI has rallied around 15.4% over a year.