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Why Is Albemarle (ALB) Down 2.7% Since Last Earnings Report?
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A month has gone by since the last earnings report for Albemarle (ALB - Free Report) . Shares have lost about 2.7% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Albemarle due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Albemarle's Q3 Earnings and Revenues Lag Estimates
Albemarle logged a profit of $302.5 million or $2.57 per share in the third quarter of 2023, down from a profit of $897.2 million or $7.61 per share a year ago.
Adjusted earnings in the reported quarter came in at $2.74 per share, lagging the Zacks Consensus Estimate of $3.70.
Revenues climbed roughly 10.5% year over year to $2.31 billion in the quarter. However, the metric missed the Zacks Consensus Estimate of $2.39 billion. The top line was driven by increased volumes in Energy Storage and higher pricing in Ketjen.
Segment Highlights
Sales from the Energy Storage unit surged around 20% year over year to roughly $1.7 billion. It fell short of the consensus estimate of $1.72 billion. Sales were boosted by higher volumes linked to the La Negra III/IV expansion project in Chile, output from the processing facility in Qinzhou, China, and increased tolling volumes in response to the growing demand from customers.
The Specialties segment recorded sales of $352.7 million, down around 20% year over year. It was below the consensus estimate of $385.1 million. Sales were impacted by 7% lower volumes and a 13% decline in pricing.
The Ketjen unit recorded revenues of $260.7 million in the reported quarter, up roughly 10.6% year over year. It was below the consensus estimate of $277.5 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 $1.6 billion, up around 16% year over year. Long-term debt was around $3.5 billion, up around 12% year over year.
Outlook
Albemarle has revised its 2023 net sales and adjusted EBITDA outlook based on the assumption that recent lithium market pricing will persist throughout the year. The company anticipates net sales in the range of $9.5-$9.8 billion, down from the previous range of $10.4-$11.5 billion. This updated forecast reflects a projected net sales increase of 30% to 35% over the prior year, primarily attributed to the 30% to 35% volumetric growth in Energy Storage driven by new mining and conversion capacity. The adjusted EBITDA for the year is now projected to be in the range of $3.2-$3.4 billion, as opposed to the earlier estimate of $3.8-$4.4 billion.
Albemarle expects adjusted earnings per share for 2023 in the band of $21.50-$23.50, down from its earlier view of $25.00-$29.50.
The company anticipates capital expenditures of $1.9-$2.1 billion for 2023. Net cash from operations is projected to be $600-$800 million for the year.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -51.33% due to these changes.
VGM Scores
Currently, Albemarle has an average Growth Score of C, a grade with the same score on the momentum front. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Albemarle has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
Performance of an Industry Player
Albemarle is part of the Zacks Chemical - Diversified industry. Over the past month, Huntsman (HUN - Free Report) , a stock from the same industry, has gained 5.8%. The company reported its results for the quarter ended September 2023 more than a month ago.
Huntsman reported revenues of $1.51 billion in the last reported quarter, representing a year-over-year change of -25.1%. EPS of $0.15 for the same period compares with $0.71 a year ago.
Huntsman is expected to post a loss of $0.05 per share for the current quarter, representing a year-over-year change of -225%. Over the last 30 days, the Zacks Consensus Estimate has changed -132.6%.
Huntsman has a Zacks Rank #4 (Sell) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.
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Why Is Albemarle (ALB) Down 2.7% Since Last Earnings Report?
A month has gone by since the last earnings report for Albemarle (ALB - Free Report) . Shares have lost about 2.7% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Albemarle due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Albemarle's Q3 Earnings and Revenues Lag Estimates
Albemarle logged a profit of $302.5 million or $2.57 per share in the third quarter of 2023, down from a profit of $897.2 million or $7.61 per share a year ago.
Adjusted earnings in the reported quarter came in at $2.74 per share, lagging the Zacks Consensus Estimate of $3.70.
Revenues climbed roughly 10.5% year over year to $2.31 billion in the quarter. However, the metric missed the Zacks Consensus Estimate of $2.39 billion. The top line was driven by increased volumes in Energy Storage and higher pricing in Ketjen.
Segment Highlights
Sales from the Energy Storage unit surged around 20% year over year to roughly $1.7 billion. It fell short of the consensus estimate of $1.72 billion. Sales were boosted by higher volumes linked to the La Negra III/IV expansion project in Chile, output from the processing facility in Qinzhou, China, and increased tolling volumes in response to the growing demand from customers.
The Specialties segment recorded sales of $352.7 million, down around 20% year over year. It was below the consensus estimate of $385.1 million. Sales were impacted by 7% lower volumes and a 13% decline in pricing.
The Ketjen unit recorded revenues of $260.7 million in the reported quarter, up roughly 10.6% year over year. It was below the consensus estimate of $277.5 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 $1.6 billion, up around 16% year over year. Long-term debt was around $3.5 billion, up around 12% year over year.
Outlook
Albemarle has revised its 2023 net sales and adjusted EBITDA outlook based on the assumption that recent lithium market pricing will persist throughout the year. The company anticipates net sales in the range of $9.5-$9.8 billion, down from the previous range of $10.4-$11.5 billion. This updated forecast reflects a projected net sales increase of 30% to 35% over the prior year, primarily attributed to the 30% to 35% volumetric growth in Energy Storage driven by new mining and conversion capacity. The adjusted EBITDA for the year is now projected to be in the range of $3.2-$3.4 billion, as opposed to the earlier estimate of $3.8-$4.4 billion.
Albemarle expects adjusted earnings per share for 2023 in the band of $21.50-$23.50, down from its earlier view of $25.00-$29.50.
The company anticipates capital expenditures of $1.9-$2.1 billion for 2023. Net cash from operations is projected to be $600-$800 million for the year.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -51.33% due to these changes.
VGM Scores
Currently, Albemarle has an average Growth Score of C, a grade with the same score on the momentum front. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Albemarle has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
Performance of an Industry Player
Albemarle is part of the Zacks Chemical - Diversified industry. Over the past month, Huntsman (HUN - Free Report) , a stock from the same industry, has gained 5.8%. The company reported its results for the quarter ended September 2023 more than a month ago.
Huntsman reported revenues of $1.51 billion in the last reported quarter, representing a year-over-year change of -25.1%. EPS of $0.15 for the same period compares with $0.71 a year ago.
Huntsman is expected to post a loss of $0.05 per share for the current quarter, representing a year-over-year change of -225%. Over the last 30 days, the Zacks Consensus Estimate has changed -132.6%.
Huntsman has a Zacks Rank #4 (Sell) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.