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LyondellBasell's (LYB) Q4 Earnings Beat, Sales Lag Estimates
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LyondellBasell Industries N.V. (LYB - Free Report) recorded earnings of $353 million or $1.07 per share in the fourth quarter of 2022, reflecting a fall of 51% from the year-ago quarter's profit of $716 million or $2.18 per share.
LYB posted adjusted earnings of $1.29 per share, down 65% from the year-ago quarter figure of $3.63. It surpassed the Zacks Consensus Estimate of $1.09.
The company’s net sales in the fourth quarter were $10,206 million, which lagged the Zacks Consensus Estimate of $10,434.3 million. Net sales decreased around 20% from $12,830 million in the prior-year quarter.
In the reported quarter, the company witnessed price and margin pressure from consumer destocking, new supply and weak demand in petrochemical markets at stabilized levels, as seen during the end of the third quarter. To match the lower demand levels, LYB reduced its operating rates during the quarter. Reduced product prices were partly offset by moderate levels of energy and feedstock prices. However, the company saw its oxyfuels and refining segments margins above the normal fourth-quarter levels.
LyondellBasell Industries N.V. Price, Consensus and EPS Surprise
In the Olefins & Polyolefins — Americas division, EBITDA decreased roughly 72% year over year to $359 million in the reported quarter. Olefins’ results fell due to lower margins and volumes.
The Olefins & Polyolefins — Europe, Asia, the international segment witnessed a loss in EBITDA of $152 million from the prior-year quarter levels of $155 million. Olefins results declined due to reduced volumes due to lower utilization. Weak European demand also contributed to the decline in this segment.
The Advanced Polymer Solutions segment posted an EBITDA of $3 million, down around 88% from the year-ago quarter. High levels of raw material and energy costs resulted in a decline in the performance of this segment. The segment also faced lower demand.
EBITDA in the Intermediates and Derivatives segment increased around 16% on a year-over-year basis to $291 million. The segment saw lower volumes in the oxyfuels business, but margin levels remained above historical levels. Styrene margins also improved in the fourth quarter on a sequential comparison basis due to lower feedstock costs.
The Refining segment reported an EBITDA of $322 million in the reported quarter, up around 115% from the year-ago quarter.
The Technology segment’s EBITDA was $59 million in the reported quarter, down around 70% year over year. The downside was due to lower catalyst volumes due to low demand.
FY22 Results
Adjusted earnings for full-year 2022 were $12.46 per share compared with $18.19 a year ago. Net sales rose around 9.3% to $50,451 million.
Financials
LyondellBasell generated $1.6 billion in cash from operating activities during the quarter. The company returned $3.7 billion as dividends and share repurchases during the year.
Outlook
Moving ahead, the company expects the challenging economic environment to continue, at least in the first half of 2023. The company noted stable demand from consumer packaging, oxyfuels and refining markets during January. While aligning its production process with global demand trends, LYB expects utilization rates for its operating assets to be 80% for its Olefins & Polyolefins and intermediates & derivatives segments. The company also sees seasonal demand improvements in 2023.
Price Performance
Shares of LyondellBasell have lost 3.9% in the past year against 9.4% rise of the industry.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
LyondellBasell currently carries a Zacks Rank #4 (Sell).
CMC’s shares have gained 61.9% in the past year. The Zacks Consensus Estimate for CMC’S current-year earnings has been revised 9.8% upward in the past 60 days. The firm outpaced Zacks Consensus Estimate in all of the last four quarters. It delivered a trailing four-quarter earnings surprise of 16.7% on average.
Nucor’s shares have gained 58.8% in the past year. The Zacks Consensus Estimate for NUE’S current-year earnings has been revised 10.6% upward in the past 60 days. The company topped Zacks Consensus Estimate in all of the last fourth quarters. It delivered a trailing four-quarter earnings surprise of 7.7% on average.
Agnico’s shares have gained 14% in the past year. The Zacks Consensus Estimate for AEM’s current-year earnings has been revised 0.4% upward in the past 60 days.
Agnico Eagle beat Zacks Consensus Estimate in three of the last four quarters. It delivered a trailing four-quarter earnings surprise of 26.4% on average.
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LyondellBasell's (LYB) Q4 Earnings Beat, Sales Lag Estimates
LyondellBasell Industries N.V. (LYB - Free Report) recorded earnings of $353 million or $1.07 per share in the fourth quarter of 2022, reflecting a fall of 51% from the year-ago quarter's profit of $716 million or $2.18 per share.
LYB posted adjusted earnings of $1.29 per share, down 65% from the year-ago quarter figure of $3.63. It surpassed the Zacks Consensus Estimate of $1.09.
The company’s net sales in the fourth quarter were $10,206 million, which lagged the Zacks Consensus Estimate of $10,434.3 million. Net sales decreased around 20% from $12,830 million in the prior-year quarter.
In the reported quarter, the company witnessed price and margin pressure from consumer destocking, new supply and weak demand in petrochemical markets at stabilized levels, as seen during the end of the third quarter. To match the lower demand levels, LYB reduced its operating rates during the quarter. Reduced product prices were partly offset by moderate levels of energy and feedstock prices. However, the company saw its oxyfuels and refining segments margins above the normal fourth-quarter levels.
LyondellBasell Industries N.V. Price, Consensus and EPS Surprise
LyondellBasell Industries N.V. price-consensus-eps-surprise-chart | LyondellBasell Industries N.V. Quote
Segment Highlights
In the Olefins & Polyolefins — Americas division, EBITDA decreased roughly 72% year over year to $359 million in the reported quarter. Olefins’ results fell due to lower margins and volumes.
The Olefins & Polyolefins — Europe, Asia, the international segment witnessed a loss in EBITDA of $152 million from the prior-year quarter levels of $155 million. Olefins results declined due to reduced volumes due to lower utilization. Weak European demand also contributed to the decline in this segment.
The Advanced Polymer Solutions segment posted an EBITDA of $3 million, down around 88% from the year-ago quarter. High levels of raw material and energy costs resulted in a decline in the performance of this segment. The segment also faced lower demand.
EBITDA in the Intermediates and Derivatives segment increased around 16% on a year-over-year basis to $291 million. The segment saw lower volumes in the oxyfuels business, but margin levels remained above historical levels. Styrene margins also improved in the fourth quarter on a sequential comparison basis due to lower feedstock costs.
The Refining segment reported an EBITDA of $322 million in the reported quarter, up around 115% from the year-ago quarter.
The Technology segment’s EBITDA was $59 million in the reported quarter, down around 70% year over year. The downside was due to lower catalyst volumes due to low demand.
FY22 Results
Adjusted earnings for full-year 2022 were $12.46 per share compared with $18.19 a year ago. Net sales rose around 9.3% to $50,451 million.
Financials
LyondellBasell generated $1.6 billion in cash from operating activities during the quarter. The company returned $3.7 billion as dividends and share repurchases during the year.
Outlook
Moving ahead, the company expects the challenging economic environment to continue, at least in the first half of 2023. The company noted stable demand from consumer packaging, oxyfuels and refining markets during January. While aligning its production process with global demand trends, LYB expects utilization rates for its operating assets to be 80% for its Olefins & Polyolefins and intermediates & derivatives segments. The company also sees seasonal demand improvements in 2023.
Price Performance
Shares of LyondellBasell have lost 3.9% in the past year against 9.4% rise of the industry.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
LyondellBasell currently carries a Zacks Rank #4 (Sell).
Better-ranked stocks to consider in the basic materials space include Commercial Metals Company (CMC - Free Report) , Nucor Corporation (NUE - Free Report) and Agnico Eagle Mines Limited (AEM - Free Report) . CMC and NUE both sport a Zacks Rank #1 (Strong Buy), while AEM carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
CMC’s shares have gained 61.9% in the past year. The Zacks Consensus Estimate for CMC’S current-year earnings has been revised 9.8% upward in the past 60 days. The firm outpaced Zacks Consensus Estimate in all of the last four quarters. It delivered a trailing four-quarter earnings surprise of 16.7% on average.
Nucor’s shares have gained 58.8% in the past year. The Zacks Consensus Estimate for NUE’S current-year earnings has been revised 10.6% upward in the past 60 days. The company topped Zacks Consensus Estimate in all of the last fourth quarters. It delivered a trailing four-quarter earnings surprise of 7.7% on average.
Agnico’s shares have gained 14% in the past year. The Zacks Consensus Estimate for AEM’s current-year earnings has been revised 0.4% upward in the past 60 days.
Agnico Eagle beat Zacks Consensus Estimate in three of the last four quarters. It delivered a trailing four-quarter earnings surprise of 26.4% on average.