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Albemarle's (ALB) Q2 Earnings Top Estimates, Revenues Lag
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Albemarle Corporation (ALB - Free Report) logged a profit of $650 million or $5.52 per share in the second quarter of 2023, up from a profit of $406.8 million or $3.46 per share a year ago.
Adjusted earnings in the reported quarter came in at $7.33 per share, topping the Zacks Consensus Estimate of $4.27.
Revenues climbed roughly 60% year over year to $2,370.2 million in the quarter, However, it missed the Zacks Consensus Estimate of $2,507.6 million. The top line was driven by higher pricing from Energy Storage and Ketjen units. However, the company saw lower volumes in the Specialties segment.
Albemarle Corporation Price, Consensus and EPS Surprise
Sales from the Energy Storage unit surged around 120% year over year to $1,763.1 million. It fell short of our estimate of $1,861.2 million. Sales were driven by increased volumes and higher pricing due to tight market conditions. Volumes rose 36% in the quarter on the back of the La Negra III/IV expansion in Chile, increased tolling volumes to meet rising customer demand and production from the processing plant in Qinzhou, China.
The Specialties segment recorded sales of $371.3 million, down around 20% year over year. It was below our estimate of $517.9 million. Sales were impacted by 15% lower volumes and a 5% decline in pricing due to softer demand.
The Ketjen unit recorded revenues of $235.8 million in the reported quarter, up roughly 12% year over year. It was above our estimate of $199.3 million. Sales were aided by higher prices, especially from fluid catalytic cracking and clean fuel technologies.
Financial Position
Albemarle ended the quarter with cash and cash equivalents of roughly $1,599.7 million, up around 72% year over year. Long-term debt was around $3,509.3 million, up around 9% year over year.
Cash flow from operations was $794.7 million for the quarter, up from $60.3 million a year ago.
Outlook
Albemarle raised its outlook for net sales and adjusted EBITDA for 2023 factoring in the recent rise lithium market prices. It now expects net sales in the band of $10.4-$11.5 billion, compared with $9.8-$11.5 billion expected earlier. It sees continued global shift to electric vehicles to drive a 40-55% year-over-year rise in net sales in 2023. Adjusted EBITDA for the year is now forecast to be $3.8-$4.4 billion, compared with $3.3-$4 billion expected earlier.
Albemarle also expects adjusted earnings per share for 2023 in the band of $25.00-$29.50, up from its earlier view of $20.75-$25.75.
The company now anticipates capital expenditures of $1.9-$2.1 billion for 2023. Net cash from operations is projected to be $1.2-$1.8 billion for the year.
Price Performance
Shares of Albemarle have lost 13.6% in the past year compared with a 12.9% rise of the industry.
Image Source: Zacks Investment Research
Zacks Rank & Other Key Picks
Albemarle currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks worth a look in the basic materials space include Carpenter Technology Corporation (CRS - Free Report) , PPG Industries, Inc. (PPG - Free Report) and ATI Inc. (ATI - Free Report) .
The Zacks Consensus Estimate for current fiscal-year earnings for CRS is currently pegged at $3.23, implying year-over-year growth of 183.3%. Carpenter Technology currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Carpenter Technology has a trailing four-quarter earnings surprise of roughly 10%, on average. The stock has rallied around 74% in a year.
PPG Industries currently carries a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for PPG's current-year earnings has been revised 3% upward over 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 7.3%, on average. PPG shares have gained around 11% in a year.
ATI currently carrying a Zacks Rank #2. It has a projected earnings growth rate of 13.1% for the current year.
ATI’s earnings beat the Zacks Consensus Estimate in three of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 13%, on average. ATI shares are up around 65% in a year.
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Albemarle's (ALB) Q2 Earnings Top Estimates, Revenues Lag
Albemarle Corporation (ALB - Free Report) logged a profit of $650 million or $5.52 per share in the second quarter of 2023, up from a profit of $406.8 million or $3.46 per share a year ago.
Adjusted earnings in the reported quarter came in at $7.33 per share, topping the Zacks Consensus Estimate of $4.27.
Revenues climbed roughly 60% year over year to $2,370.2 million in the quarter, However, it missed the Zacks Consensus Estimate of $2,507.6 million. The top line was driven by higher pricing from Energy Storage and Ketjen units. However, the company saw lower volumes in the Specialties segment.
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 around 120% year over year to $1,763.1 million. It fell short of our estimate of $1,861.2 million. Sales were driven by increased volumes and higher pricing due to tight market conditions. Volumes rose 36% in the quarter on the back of the La Negra III/IV expansion in Chile, increased tolling volumes to meet rising customer demand and production from the processing plant in Qinzhou, China.
The Specialties segment recorded sales of $371.3 million, down around 20% year over year. It was below our estimate of $517.9 million. Sales were impacted by 15% lower volumes and a 5% decline in pricing due to softer demand.
The Ketjen unit recorded revenues of $235.8 million in the reported quarter, up roughly 12% year over year. It was above our estimate of $199.3 million. Sales were aided by higher prices, especially from fluid catalytic cracking and clean fuel technologies.
Financial Position
Albemarle ended the quarter with cash and cash equivalents of roughly $1,599.7 million, up around 72% year over year. Long-term debt was around $3,509.3 million, up around 9% year over year.
Cash flow from operations was $794.7 million for the quarter, up from $60.3 million a year ago.
Outlook
Albemarle raised its outlook for net sales and adjusted EBITDA for 2023 factoring in the recent rise lithium market prices. It now expects net sales in the band of $10.4-$11.5 billion, compared with $9.8-$11.5 billion expected earlier. It sees continued global shift to electric vehicles to drive a 40-55% year-over-year rise in net sales in 2023. Adjusted EBITDA for the year is now forecast to be $3.8-$4.4 billion, compared with $3.3-$4 billion expected earlier.
Albemarle also expects adjusted earnings per share for 2023 in the band of $25.00-$29.50, up from its earlier view of $20.75-$25.75.
The company now anticipates capital expenditures of $1.9-$2.1 billion for 2023. Net cash from operations is projected to be $1.2-$1.8 billion for the year.
Price Performance
Shares of Albemarle have lost 13.6% in the past year compared with a 12.9% rise of the industry.
Image Source: Zacks Investment Research
Zacks Rank & Other Key Picks
Albemarle currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks worth a look in the basic materials space include Carpenter Technology Corporation (CRS - Free Report) , PPG Industries, Inc. (PPG - Free Report) and ATI Inc. (ATI - Free Report) .
The Zacks Consensus Estimate for current fiscal-year earnings for CRS is currently pegged at $3.23, implying year-over-year growth of 183.3%. Carpenter Technology currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Carpenter Technology has a trailing four-quarter earnings surprise of roughly 10%, on average. The stock has rallied around 74% in a year.
PPG Industries currently carries a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for PPG's current-year earnings has been revised 3% upward over 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 7.3%, on average. PPG shares have gained around 11% in a year.
ATI currently carrying a Zacks Rank #2. It has a projected earnings growth rate of 13.1% for the current year.
ATI’s earnings beat the Zacks Consensus Estimate in three of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 13%, on average. ATI shares are up around 65% in a year.