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Albemarle's (ALB) Q1 Earnings Top Estimates, Revenues Miss

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Albemarle Corporation (ALB - Free Report) logged a profit of $1,238.6 million or $10.51 per share in the first quarter of 2023, up from a profit of $253.4 million or $2.15 per share a year ago.

Adjusted earnings in the reported quarter were $10.32 per share, topping the Zacks Consensus Estimate of $6.93.

Revenues climbed roughly 129% year over year to $2,580.3 million in the quarter, However, it trailed the Zacks Consensus Estimate of $2,736.5 million. The top line was driven by higher lithium pricing and increased volumes.

 

Albemarle Corporation Price, Consensus and EPS Surprise

 

Albemarle Corporation Price, Consensus and EPS Surprise

Albemarle Corporation price-consensus-eps-surprise-chart | Albemarle Corporation Quote

 

Segment Highlights

Sales from the Energy Storage unit surged 319% year over year to $1,943.7 million. Sales were driven by higher pricing (up 301% net of currency) associated with renegotiated contracts and higher market pricing. Volumes rose 18% in the quarter on the back of the La Negra III/IV expansion in Chile and increased tolling volumes to meet rising customer demand.

The Specialties segment recorded sales of $418.8 million, down around 6% year over year. Sales were impacted by 15% lower volumes, partly offset by a 9% (net of currency) rise in pricing.

The Ketjen unit recorded revenues of $217.8 million in the reported quarter, flat year over year. Volumes fell 12% while pricing increased 12% (net of currency).

Financial Position

Albemarle ended the quarter with cash and cash equivalents of roughly $1,586.7 million, up more than three-fold year over year. Long-term debt was around $3,233.4 million, up around 62% year over year.

Cash flow from operations was $721 million for the quarter, up more than three-fold year over year.

Outlook

Albemarle now expects net sales in the band of $9.8-$11.5 billion for 2023 compared with $11.3-$12.9 billion expected earlier. It sees continued global shift to electric vehicles to drive a 35-55% year-over-year rise in net sales in 2023. Adjusted EBITDA for the year is now forecast to be $3.3-$4 billion, compared with $4.2-$5.1 billion expected earlier.

Albemarle also sees adjusted earnings per share guidance for 2023 in the band of $20.75-$25.75, down from its earlier view of $26.00-$33.00.

The company anticipates capital expenditures of $1.7-$1.9 billion for 2023. Net cash from operations is projected to be $1.7-$2.3 billion for the year.

Price Performance

Shares of Albemarle have lost 29.6% in the past year compared with a 7% decline of the industry.

 

Zacks Investment Research
Image Source: Zacks Investment Research

 

Zacks Rank & Other Key Picks

Albemarle currently carries a Zacks Rank #4 (Sell).

Better-ranked stocks worth considering in the basic materials space include Steel Dynamics, Inc. (STLD - Free Report) , PPG Industries, Inc. (PPG - Free Report) and Linde plc (LIN - Free Report) .

Steel Dynamics currently sports a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for STLD's current-year earnings has been revised 24% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Steel Dynamics’ earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 10.7%, on average. STLD has gained around 25% in a year.

PPG Industries currently carries a Zacks Rank #2. The Zacks Consensus Estimate for PPG's current-year earnings has been revised 11.7% upward in the past 60 days.

PPG Industries’ earnings beat the Zacks Consensus Estimate in three of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 6.8%, on average. PPG has gained around 5% in a year.

Linde currently carries a Zacks Rank #2. The Zacks Consensus Estimate for LIN’s current-year earnings has been revised 3.8% upward in the past 60 days.

Linde beat Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 5.9% on average. LIN’s shares have gained roughly 16% in the past year.

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