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Sociedad Quimica (SQM) Q2 Earnings and Sales Lag Estimates
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Sociedad Quimica y Minera de Chile S.A. (SQM - Free Report) recorded earnings of $2.03 per share for second-quarter 2023, down from $3.01 in the year-ago quarter. Earnings per share for the reported quarter missed the Zacks Consensus Estimate of $2.62.
The company registered revenues of $2,051.7 million for the quarter, down around 21% year over year. It missed the Zacks Consensus Estimate of $2,240.3 million.
The company’s results were hurt by the lower realized average sales prices in the lithium unit. Although lithium sales volumes recovered significantly and reached record high levels, reduced spot prices unfavorably impacted sales and the bottom line in the reported quarter.
Sociedad Quimica y Minera S.A. Price, Consensus and EPS Surprise
Revenues from the Lithium and Derivatives segment fell roughly 21% year over year to $1,464.6 million in the reported quarter. Significantly higher sales volumes (up more than 26% year over year) were offset by lower average sales prices (down around 37% year over year).
The Specialty Plant Nutrients ("SPN") segment raked in revenues of $247.5 million, down around 25% year over year. Sales were hurt by reduced sales volumes and lower average sales prices.
Revenues from the Iodine and Derivatives unit came in at $221.3 million, up around 27% year over year. The segment benefited from higher average prices.
Revenues from the Potassium Chloride and Potassium Sulfate business fell roughly 64% year over year to $66.2 million. Sales were impacted by lower average sales prices and sales volumes.
The Industrial Chemicals unit recorded sales of $47.1 million, down around 20% year over year, impacted by lower sales volumes.
Financials
The company’s cash and cash equivalents were $2,062.8 million, down around 1% on a sequential basis. Long-term debt was $2,508.7 million, up around 4% sequentially.
Outlook
Moving ahead, SQM sees favorable dynamics in the lithium market on strong EV sales volumes. It envisions global lithium demand to rise at least 20% year over year in 2023. The company expects sales volumes to rise in the second half compared with the first half.
The company also expects the strong performance in the iodine business to continue and sees higher average sales prices and increased sales volumes in 2023.
In SPN, SQM expects demand recovery to continue into the second half. However, it anticipates the annual global demand growth to be flat to negative in 2023.
The company also expects its potassium sale volumes to exceed 500,000 metric tons in 2023.
Price Performance
Shares of Sociedad Quimica are down 29.3% over a year compared with the industry’s decline of 31.6%.
Image Source: Zacks Investment Research
Zacks Rank & Other Key Picks
SQM 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 Universal Stainless & Alloy Products, Inc. (USAP - Free Report) .
The Zacks Consensus Estimate for current fiscal-year earnings for CRS is currently pegged at $3.48, implying year-over-year growth of 205.3%. 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 51% 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 3.6% 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 5% in a year.
Universal Stainless & Alloy Products currently carrying a Zacks Rank #2. It has a projected earnings growth rate of 160.8% for the current year.
The Zacks Consensus Estimate for USAP's current-year earnings has been revised 181% upward over the past 60 days. USAP shares are up around 60% in a year.
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Sociedad Quimica (SQM) Q2 Earnings and Sales Lag Estimates
Sociedad Quimica y Minera de Chile S.A. (SQM - Free Report) recorded earnings of $2.03 per share for second-quarter 2023, down from $3.01 in the year-ago quarter. Earnings per share for the reported quarter missed the Zacks Consensus Estimate of $2.62.
The company registered revenues of $2,051.7 million for the quarter, down around 21% year over year. It missed the Zacks Consensus Estimate of $2,240.3 million.
The company’s results were hurt by the lower realized average sales prices in the lithium unit. Although lithium sales volumes recovered significantly and reached record high levels, reduced spot prices unfavorably impacted sales and the bottom line in the reported quarter.
Sociedad Quimica y Minera S.A. Price, Consensus and EPS Surprise
Sociedad Quimica y Minera S.A. price-consensus-eps-surprise-chart | Sociedad Quimica y Minera S.A. Quote
Segment Highlights
Revenues from the Lithium and Derivatives segment fell roughly 21% year over year to $1,464.6 million in the reported quarter. Significantly higher sales volumes (up more than 26% year over year) were offset by lower average sales prices (down around 37% year over year).
The Specialty Plant Nutrients ("SPN") segment raked in revenues of $247.5 million, down around 25% year over year. Sales were hurt by reduced sales volumes and lower average sales prices.
Revenues from the Iodine and Derivatives unit came in at $221.3 million, up around 27% year over year. The segment benefited from higher average prices.
Revenues from the Potassium Chloride and Potassium Sulfate business fell roughly 64% year over year to $66.2 million. Sales were impacted by lower average sales prices and sales volumes.
The Industrial Chemicals unit recorded sales of $47.1 million, down around 20% year over year, impacted by lower sales volumes.
Financials
The company’s cash and cash equivalents were $2,062.8 million, down around 1% on a sequential basis. Long-term debt was $2,508.7 million, up around 4% sequentially.
Outlook
Moving ahead, SQM sees favorable dynamics in the lithium market on strong EV sales volumes. It envisions global lithium demand to rise at least 20% year over year in 2023. The company expects sales volumes to rise in the second half compared with the first half.
The company also expects the strong performance in the iodine business to continue and sees higher average sales prices and increased sales volumes in 2023.
In SPN, SQM expects demand recovery to continue into the second half. However, it anticipates the annual global demand growth to be flat to negative in 2023.
The company also expects its potassium sale volumes to exceed 500,000 metric tons in 2023.
Price Performance
Shares of Sociedad Quimica are down 29.3% over a year compared with the industry’s decline of 31.6%.
Image Source: Zacks Investment Research
Zacks Rank & Other Key Picks
SQM 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 Universal Stainless & Alloy Products, Inc. (USAP - Free Report) .
The Zacks Consensus Estimate for current fiscal-year earnings for CRS is currently pegged at $3.48, implying year-over-year growth of 205.3%. 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 51% 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 3.6% 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 5% in a year.
Universal Stainless & Alloy Products currently carrying a Zacks Rank #2. It has a projected earnings growth rate of 160.8% for the current year.
The Zacks Consensus Estimate for USAP's current-year earnings has been revised 181% upward over the past 60 days. USAP shares are up around 60% in a year.